Monthly Social Security and Supplemental Security Income (SSI) benefits for more than 60 million Americans will increase 3.6 percent in 2012.
The 3.6 percent cost-of-living adjustment (COLA) will begin with benefits that nearly 55 million Social Security beneficiaries receive in January 2012. Increased payments to more than 8 million SSI beneficiaries will begin on December 30, 2011.
Some other changes that take effect in January of each year are based on the increase in average wages.
Maximum Earnings Subject to Social Security Tax – Based on that increase, the maximum amount of earnings subject to the Social Security tax (taxable maximum) will increase to $110,100 from $106,800 in 2011. Of the estimated 161 million workers who will pay Social Security taxes in 2012, about 10 million will pay higher taxes as a result of the increase in the taxable maximum.
Earning Limit: The earnings limit for workers who are younger than “full” retirement age (age 66 for people born in 1943 through 1954) and drawing Social Security will be $14,640. ($1 is deducted from an individuals Social Security benefits for each $2 earned over $14,640.) The earnings limit for people turning 66 in 2012 will be $38,880. ($1 is deducted from Social Security benefits for each $3 earned over $38,880 until the month the worker turns age 66.) There is no limit on earnings for workers who are “full” retirement age or older for the entire year.
If you have questions related to Social Security issues please give this office a call.