Previously we reported that Social Security beneficiaries could expect a 2.8 percent increase in benefits for 2019 based on the increase in the Consumer Price Index (CPI-W) from the third quarter of 2017 to the third quarter of 2018, which is how the annual cost-of-living adjustment (COLA) is calculated. Social Security has now confirmed this as it officially released the news October 11.
Each year when Social Security announces benefit increases it also releases other important information related to taxes, income and other benefit limits. Below we take a look at some of the more important figures Social Security released.
Maximum Taxable Amount
Employees were taxed at a rate of 7.65 percent by Social Security in 2018 and that rate will stay the same for 2019, but the maximum taxable earnings will increase from $128,400 to $132,900 in 2019. This means that income earned up to $132,900 will be taxed by Social Security, but any income earned over this amount would not be subjected to Social Security taxes.
Maximum Benefit Amounts
Social Security sets maximum benefit amounts for its different programs regardless of how much someone earns over their lifetime. The maximum retirement benefit in 2018 was $2,778. That amount increases to $2,861 per month in 2019. Supplemental Security Income (SSI) is a needs-based program for people with limited income and assets. In 2018 the maximum monthly SSI benefit was $750, this will increase to $771 in 2019. The maximum monthly benefit amount for married couples will increase to $1,157 compared to $1,125 in 2018. There will be no change to the SSI resource limit, which is $2,000 for individuals and $3,000 for married couples.
Average Amounts
The national average monthly amount of Social Security retirement benefits will increase from $1,422 to $1,461 after a 2.8 percent increase. The average disability insurance amount will go from $1,200 to $1,234 in 2019. For a complete breakdown of all benefit changes click here.
