America’s Social Security program may seem unpredictable, but U.S. News & World Report has the hard facts on this year’s biggest changes and what you can expect from them.
1. Prepare to get a boost.
For the first time since 2009, some 60 million Social Security recipients will get a 3.6 percent pay increase — that’s about $43 more per month. Be aware, however, that a portion of the increase may be deducted to pay for higher Medicare Part B premiums.
2. The Social Security tax will go up.
The maximum amount of earnings subject to Social Security taxes has gone from $106,800 to $110,100 in 2012.
3. The ‘holidays’ aren’t over.
The 2 percent payroll tax cut that workers received in 2011 was recently extended through the first two months of 2012. This means that workers will continue to have 4.2 percent of their pay deposited into the Social Security trust fund until the end of February.
4. Expect changes for higher earning limits.
– Early retirees who work and collect Social Security benefits at the same time can earn $480 more next year before a portion of their Social Security benefit will be temporally withheld.
– Recipients below their full retirement age (66 for those born between 1943 and 1954) can earn up to $14,640 in 2012, above which 50 cents of each dollar earned will be withheld from their checks.
– If you’ll turn 66 this year, the limit go up to $38,880, after which 33 cents of each dollar earned will be deducted from monthly payments. Starting the month you turn 66, there won’t be a penalty for working and collecting Social Security benefits.
5. The maximum possible benefit will grow.
The maximum amount of money in a Social Security check will increase to $2,513 per month — that’s up from $2,366 in 2011.
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