Next $914 payment to drop soon as 33 states boost benefits - see exact date (2024)

20th Mar 2023, 13:30By Josephine Fuller

How much you pay into FICA, continued

This means you won’t pay theSocial Securitypart of the payroll tax on earnings above that amount.

So in 2022, the maximum Social Security tax an employee will have withheld is $9,114, according to Investopedia.

There is no such limit for theMedicareportion.

However, an additional 0.9 percent per month is charged on earnings above $200,000 a year.

Only a worker pays this extra element, not the employer.

20th Mar 2023, 12:59By Josephine Fuller

How much you pay into FICA

Most Americans have theirtaxestaken out of their payslip and the main one is known as the Federal Insurance Contributions Act (FICA).

The charge is more commonly known as payroll tax and FICA refers to the law that requires employers to take money from staff paychecks.

Each month, your boss will take 6.2 percent of your wage and will contribute 6.2 percent per employee for Social Security, equalling 12.4 percent in total.

The current rate forMedicareis 1.45 percent for the employer and 1.45 percent for a worker, translating to 2.9 percent total, according to the IRS.

However, theSocial Securityelement of payroll taxhas increased in 2022to a wage base limit of $147,000.

20th Mar 2023, 12:30By Josephine Fuller

What does FICA tax cover?

FICAtaxes fundSocial Securitypayments andMedicare.

Social Securitytaxesgo into a pot for the Old-Age and Survivors Insurance Trust Fund and theDisabilityInsurance Trust Fund.

Of course, as the names indicate, the funds cover retirement, survivor and disability benefits.

TheMedicarepart of the payroll tax covers inpatient hospital visits and other healthcare services for the elderly and some others suffering from specifiedconditions.

Payroll taxes also fund unemployment insurance, which provides benefits to workers who have lost a job through no fault of their own.

20th Mar 2023, 12:00By Josephine Fuller

Democrats push a boost to Social Security

Although a bill was introduced in 2022 in both the House and Senate that would giveSocial Securityclaimants an extra $200 a month, it wasn't passed.

TheSocial Security ExpansionAct would have given recipients an extra $2,400 on average per year.

SenatorBernie Sandersreintroduced the bill last month with extra support from a host of fellowDemocrats, including SenatorElizabeth Warren, along with Representatives Jan Schakowsky and Val Hoyle.

20th Mar 2023, 11:30By Josephine Fuller

Older adults spending more because of COLA increase, continued

The change in spending habits was noted since the end of November 2022, when older generations began to increase their spending.

This came just a month afterCOLAwas announced in October, but boostedSocial Securitypayments didn't hit accounts until January.

For the week ending February 18, Baby Boomers grew total card spending per household by 4 percent, while there was only a 2 percent jump for all ages.

20th Mar 2023, 11:00By Josephine Fuller

Older adults spending more because of COLA increase

Older Americans are spending far more than their younger counterparts due toCOLA's impact onSocial Securitybenefits.

Households that received Social Security payments saw far greater spending growth than others, according to a study from the Bank of America Institute.

The study analyzed credit and debit card data, which revealed older Americans are upping spending far faster than other generations.

“Historically, the older generations were spending in line with other generations. This widening was a little unusual,” said David Tinsley, senior economist at the Bank of America Institute, according toMarketWatch.

“COLA has boosted older generation spending. The jury is out a bit on when the spending will stop.”

Social Security saw an increase of 8.7 percent, the highest in 40 years, courtesy of the COLA.

20th Mar 2023, 10:30By Josephine Fuller

Birth rate threatens future of Social Security

Despite widespread concerns thatSocial Securityis in trouble due to Americans living longer, it actually may come down to the slowing birth rate, experts say.

The birth rate has narrowed from three children per mother to just two, which means American workers may not be able to keep funding the program.

“Social Security is a pay-as-you-go system, which means that today’s workers are paying for today’s retirees,” said Catherine Collinson, CEO and president ofTransamerica Instituteand Transamerica Center for Retirement Studies,according to Yahoo Finance.

As that birth rate stalls and generations continue to pay for current retires, only 75 percent of scheduled payments will be covered in 12 years.

Then, the SSA will have to solely rely on tax revenue to support beneficiaries.

20th Mar 2023, 10:00By Josephine Fuller

Ways to save Social Security, conclusion

IfSocial Securitybenefits were reduced for those with higher incomes, around 11 percent of the budgetary shortfall for the program would be saved.

This is true if the program lowered benefits for those with an income in the top 20 percent specifically.

To date, more than 80 percent of Americans are in favor of this option, which could help preserve the Social Security program for more Americans in the years to come.

20th Mar 2023, 09:30By Josephine Fuller

Ways to save Social Security, part three

A clear option to help save theSocial Securityis to raise the retirement age, but this strategy is often fiercely debated.

Around 75 percent of bothRepublicansandDemocratsare in favor of raising the retirement age so that Americans will continue seeing Social Security benefits in the decades to come.

Currently, workers can’t access full benefits until they reach their full retirement age of 67 (for those born in 1960 or later).

If the program slowly raised that age to 68 over the next 10 years, around 14 percent of the budgetary shortfall.

20th Mar 2023, 09:00By Josephine Fuller

Ways to save Social Security, continued

Another option that’s been proposed to saveSocial Securityis to apply the Social Security tax to more wages.

This is nearly universally supported by Americans, including 79 percent ofRepublicansand 88 percent ofDemocrats.

Because the payroll tax currently only applies to workers’ first $160,200 in earnings, there would be room for more money to go to the program if the cap was expanded.

If all wages over $400,000 were taxed, 61 percent of thebudgetary shortfall would be gone,according to the Motley Fool.

20th Mar 2023, 08:30By Josephine Fuller

Ways to save Social Security

AsRepublicansandDemocratsfight over the future ofSocial Security, many different solutions have been proposed to the looming budgetary crisis for the program.

One option is to increase the Social Security payrolltax.

According to the University ofMaryland, raising the tax rate to 6.5 percent for both employers and employees alike could get rid of 16 percent of the current budget dilemma.

Overall, more than 70 percent of Americans are in favor of this option, including 70 percent of Americans and 78 percent of Democrats.

Currently, employers and employees contribute 6.2 percent of wages to the Social Security program.

20th Mar 2023, 08:00By Josephine Fuller

Future of Social Security funds in jeopardy by 2033

The Congressional Budget Office released itslong-term projectionson Social Security in December, sharing it is likely the program’s funds will be depleted by 2033.

This means theSocial Securityadministration will not be able to pay full retirement benefits when they are due.

The Old-Age and Survivors Insurance Trust Fund will be completely gone by 2033 if nothing changes.

Similarly, the Disability Insurance Trust Fund will be used by 2048.

20th Mar 2023, 07:30By Josephine Fuller

Social Security rules for divorcees, part three

According to theSSA, if you have been divorced for at least two continuous years, your ex-spouse is eligible to receive retirement benefits on your record even if you have not applied yet.

However, if they are eligible for their own retirement benefits,Social Securitywill pay for that amount first.

If your benefits are higher, your ex will also get an additional amount from your record, ensuring that the combination of benefits equals that higher amount.

20th Mar 2023, 07:00By Josephine Fuller

Social Security rules for divorcees, part two

The maximum spousal benefit is 50 percent of whatever your ex-spouse will collect at theirfull retirement age(FRA).

If you retire at your FRA in 2022, your maximum monthly benefit is $3,345.

This means that your ex-partner would be able to get up to $1,672.50 per month.

It’s important to note that an ex-spouse claiming benefits on your record will notreduce the amountyou receive yourself.

20th Mar 2023, 06:30By Josephine Fuller

Social Security rules for divorcees

Ex-spouses are eligible toreceive benefitson your record if they fall under a set number of categories.

These include:

• Your marriage lasted 10 years or longer
• Your ex-spouse is unmarried
• Your ex-spouse is 62 or older
• The benefit that your ex-spouse is entitled to receive based on their own work is less than the benefit they would receive based on your work
• You are entitled to Social Security retirement or disability benefits

20th Mar 2023, 06:00By Josephine Fuller

How asset limits could change

Currently, beneficiaries are only allowed a limit of $2,000 for an individual and $3,000 for couples.

These limits include anything a recipient can own including money in their bank accounts, stocks, bonds, and property.

Senators Brown and Portman have included in their proposal an expansion of this limit, increasing it to $10,000 for individuals and $20,000 for couples,The Sunhas previously reported.

20th Mar 2023, 05:30By Josephine Fuller

What is the Special SSI Rule?

According toSocial Security, there’s a special rule to help people who work and receiveSupplemental Security Income(SSI) based on blindness.

This rule allows a blind person to exclude from earned income all expenses that enable the person to work.

The expense does not need to be related to blindness.

20th Mar 2023, 05:00By Josephine Fuller

Recovering from emergency advance payments

The SSA will subtract the emergency advance payment from the payments already due to you and pay you the difference.

If you are not due past payments, the agency will subtract the emergency advance payment from your current monthly benefits in up to six monthly installments.

20th Mar 2023, 04:30By Josephine Fuller

Who can receive emergency advance payments

Those who can receive advance payments:

• Are due SSI benefits (including PD or PB payments) that are delayed or not received
• Are facing a “financial emergency” which means they need money right away due to a threat to health or safety, such as not having enough money for food, clothing, shelter, or medical care

20th Mar 2023, 04:00By Josephine Fuller

Emergency advance payments

The SSA may be able to make an emergency advance payment to new claimants facing a financial emergency and are dueSSIbenefits that are delayed or not received.

The agency can only pay one such advance payment and the maximum emergency advance payment you may receive is the smallest of:

• The SSI Federal benefit rate (plus any federally administered State supplement)
• The total amount of the benefits due
• The amount requested for the financial emergency

20th Mar 2023, 03:30By Josephine Fuller

You can apply for your ex’s benefits

If you are divorced, your ex can apply for your benefits, even if you remarry.

So long as your ex is over 62, unmarried, and is entitled to fewer benefits than you are, they can apply.

You also need to have been married for more than a decade and divorced for two years.

20th Mar 2023, 03:00By Josephine Fuller

How to sign upfor SSDI

You can apply at the SSA’s separate online portals forSSDI.

Also, you can phone the SSA from Monday through Friday between 7am and 7pm at 1-800-772-1213.

But be aware that the average wait time for an application approval typically ranges from three to five months.

20th Mar 2023, 02:30By Josephine Fuller

Who qualifies for SSDI?

To qualify for SSDI benefits, you must:

• Have worked in jobs covered by Social Security
• Have a medical condition that meets Social Security’s strictdefinition of disability

The definition of disability under Social Security is different than other programs.

Social Security will only pay for total disability as no benefits are payable for partial disability or short-term disability.

Qualifying disabilities under Social Security rules are:

• You cannot do work and engage in substantial gainful activity (SGA) because of your medical condition
• You cannot do work you did previously or adjust to other work because of your medical condition
• Your condition has lasted or is expected to last for at least one year or to result in death

20th Mar 2023, 02:00By Josephine Fuller

What is SSDI?

SSDI aims to provide relief for those with disabilities who can no longer work, or at the same capacity as once before.

The monthly payments help to replace a portion of the qualifying worker’s salary.

How much you get will depend on the age you became disabled and your employment history, including the average amount of income you’ve had.

Also, keep in mind that SSDI andSupplemental Security Income(SSI) are different.

While those with disabilities can claim both benefits at the same time, SSI aims to help blind and disabled people, who have little or no income, as well as individuals over the age of 65.

20th Mar 2023, 01:30By Josephine Fuller

Study finds Americans are losing out on $182,000 in Social Security

New research from economists at Boston University and the Federal Reserve Bank of Atlanta found American retirees are making a mistake that can cost them $182,000 in lifetime benefits,CBS News reported.

While the Social Security Administration pays full benefits at the “full retirement age” (which is anywhere from 66 to 67 years old depending on when you were born), retirees can claim the benefits when they turn 62.

However, this brings an overall 30 percent decrease in monthly payments.

If you wait until 70, however, you will get a 32 percent boost in payments.

Since only 6 percent of American workers wait until 70 to claim Social Security, most Americans are missing about $182,000 in payments by claiming Social Security early, the study found.