It's Official – These 5 Social Security Changes Are Coming Up for 2019 – Motley's Fool

We recently learned that social security recipients were benefiting from an adjustment of 2.8% of the cost of living, or COLA, for 2019. However, this is only the case. one of the many announced social security changes related to rising prices.

For workers, the maximum taxable income from social security is increasing and more income will be needed to obtain a "credit" from social security. Beneficiaries who have called for Social Security early and who are still working will be happy to learn that they will be able to earn more without a reduction in benefits in 2019; for high incomes, maximum social security benefits are also on the rise.

With all this in mind, here are the recently released details of these five 2019 Social Security changes.

Source of the image: Getty Images.

Beneficiaries get an increase

As I mentioned, social security beneficiaries receive a COLA of 2.8% from their January 2019 payment. The Social Security Administration, or SSA, estimates that the average benefit paid to all workers at retirement will increase from $ 1,422 to $ 1,461.

It is interesting to note that Medicare has not yet published its Part B premium changes for 2019 at the time of writing this article. This will be an important factor for determining the effective COLA. In other words, if your Social Security benefits increase by $ 50 per month and your Medicare premiums increase by $ 40, your actual increase is only $ 10.

The maximum taxable income from social security increases

Each year, social security contributions are assessed at a rate of 6.2% for employers and employees, but only for earnings up to a certain threshold. This is known as the maximum taxable income from social security.

For 2019, maximum taxable income will increase by $ 4,500 from $ 128,400 to $ 132,900. In other words, if you earn $ 150,000 in jobs covered by Social Security in 2019, $ 132,900 of those earnings will be subject to Social Security tax, while the remaining $ 17,100 will be taxed. will not be.

This increases the maximum social tax that an employee could pay from $ 7,960.80 in 2018 to $ 8,239.80 in 2019.

Social security credit will require more income

To qualify for social security benefits, you need to get 40 "quarters of coverage" from Social Security, also called Social Security Credits.

For 2019, a credit equals $ 1,360 in earnings, an increase of $ 40 over 2018. This may seem like little money (and this is not the case for most workers) but it's important to note that you can only earn four credits a year.

The limits of the income test increase

If you have Social Security (or plan to do so) and you have not reached the retirement age yet, you can now earn more money through a job without affecting your social security benefits. For 2019, the limits of the social security income test increase as follows:

Data source: SSA.

If you reach the retirement age after 2019, $ 1 of your benefits will be withheld for every $ 2 of excess earnings. If you reach the age of full retirement in 2019, $ 1 of your benefits will be withheld for every $ 3 of excess earnings. Only earnings in the months preceding your month of birth will be taken into account. As always, if you have already reached the retirement age, the earnings test does not concern you at all.

The maximum social security benefit will be $ 73 higher

Finally, as social security benefits are limited by the maximum taxable income in each year (which increases over time), the maximum possible social security benefit also increases for 2019.

For 2019, a maximum of $ 2,861 per month can be claimed by Social Security at the age of retirement at retirement. Of course, this could become even more important if workers entitled to the maximum decide to wait longer before claiming. They claim that in 2019, the beneficiary's retirement age is still 66 (born in 1953), so they had to wait to be 70 years old in 2023, their benefit would start at $ 3,776.52 plus other per diems granted between now and then.