Social Security Benefits set for 2013

Social Security Benefits have been set for 2013 with the release of the September 2012 Consumer Price Index. The benefit increase will be 1.7% above the 2012 levels. While Medicare insurance premiums have not been released, here is what is known:

Employer Investment

What does it mean for you?

Circle $3,600 more of your wages could be subject to Social Security tax in 2013. This equates to paying $446 more in tax.
Circle The average Social Security retirement beneficiary will receive an additional $252 in 2013.
Circle For all retired workers receiving Social Security retirement benefits the average monthly benefit of $1,240/mo. in 2012 will become $1,261/mo. in 2013.
Circle SSI (Supplemental Security Income) is the standard monthly payment for people in need. To qualify for this payment you must have little income and few resources ($2,000 if single/$3,000 if married).
Circle A full-time student who is blind or disabled can still receive Supplemental Security Income (SSI) benefits as long as earned income does not exceed the student exclusion amounts listed above.

Warning: There’s also a 2% withholding increase!

Remember to plan for the expiration of the temporary payroll tax cut at the end of 2012. This will be automatically reflected in your paychecks beginning in 2013:

Employer Investment

Note: The above tax rates are a combination of Social Security (4.20% in 2012; 6.20% in 2013) and 1.45% for Medicare. There is also a Medicare .9% wages surtax that is scheduled to begin in 2013 for those with wages above $200,000 single ($250,000 joint filers) that is not reflected in the 2013 figures. Please recall that your employer also pays Social Security and Medicare taxes on your behalf. These figures are reflected in the self-employed tax rates, as self-employed pay both halves of the tax.