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Social Security News

Social Security COLA for 2015 Will Be 1.7 Percent, Says SSA

Continues trend of very small increases over last few years - about $22 per month average increase

Oct. 22, 2014 – It is a 1.7 percent increase for the 64 millions of Americans – primarily senior citizens - that will be receiving Social Security benefits in 2015, according to an announcement of the cost-of-living adjustment (COLA) by the Social Security Administration this morning. The average recipient will get about $22 more per month.

Estimated Average Monthly Social Security Benefits Payable in January 2015:

Before
1.7% COLA

After
1.7% COLA

All Retired Workers

$1,306

$1,328

Aged Couple, Both Receiving Benefits

$2,140

$2,176

Widowed Mother and Two Children

$2,635

$2,680

Aged Widow(er) Alone

$1,253

$1,274

Disabled Worker, Spouse and One or More Children

$1,943

$1,976

All Disabled Workers

$1,146

$1,165

The Senior Citizens League (TSCL), noted for accurately predicting recent COLA amounts, had predicted the 1.7 percent increase and Chairman Ed Cates said, “That would make the sixth consecutive year of record low COLAs. That’s unprecedented since the COLA first became automatic in 1975.”

Over the past five years COLAs have gone flat, along with the inflation index used to calculate them, according to the TSCL. Inflation has been growing so slowly that the annual increase has averaged only 1.4 percent per year since 2010. That’s less than half the 3 percent average during the prior decade. In 2010 and 2011, benefits didn’t increase at all.

The 1.7 percent increase this year does not pull up the five-year average.

 

Related Archive Stories

 
 

Sixth Years of Record Low COLAs Unprecedented, Says Senior Citizens League

Oct. 20, 2014

Read more Social Security News also check Medicare and Senior Politics

 

The 1.7 percent cost-of-living adjustment (COLA) will begin with benefits that more than 58 million Social Security beneficiaries receive in January 2015. Increased payments to more than 8 million SSI beneficiaries will begin on December 31, 2014.

The purpose of the COLA is to ensure that the purchasing power of Social Security and Supplemental Security Income (SSI) benefits is not eroded by inflation. It is based on the percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the third quarter of the last year a COLA was determined to the third quarter of the current year. If there is no increase, there can be no COLA.

The CPI-W is determined by the Bureau of Labor Statistics in the Department of Labor. By law, it is the official measure used by the Social Security Administration to calculate COLAs.

The Social Security payroll taxes will also increase in 2015. Based on the increase in average wages, the maximum amount of earnings subject to the Social Security tax (taxable maximum) will increase to $118,500 from $117,000.

Frequently asked questions according to Social Security:

Will the retirement earnings test exempt amounts change in 2015?

Yes. The earnings limit for workers who are younger than "full" retirement age (age 66 for people born in 1943 through 1954) will be $15,720. (We deduct $1 from benefits for each $2 earned over $15,720.)

The earnings limit for people turning 66 in 2015 will be $41,880. (We deduct $1 from benefits for each $3 earned over $41,880 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.

Will my Medicare premiums increase in 2015?

Information about Medicare changes for 2015 is available at www.Medicare.gov.

Following are other changes for 2015 announced by Social Security this morning.

2015 SOCIAL SECURITY CHANGES

Cost-of-Living Adjustment (COLA):

Based on the increase in the Consumer Price Index (CPI-W) from the third quarter of 2013 through the third quarter of 2014, Social Security and Supplemental Security Income (SSI) beneficiaries will receive a 1.7 percent COLA for 2015. Other important 2015 Social Security information is as follows:

Tax Rate:

2014

2015

Employee

7.65%

7.65%

Self-Employed

15.30%

15.30%

NOTE:  The 7.65% tax rate is the combined rate for Social Security and Medicare.  The Social Security portion (OASDI) is 6.20% on earnings up to the applicable taxable maximum amount (see below).  The Medicare portion (HI) is 1.45% on all earnings. Also, as of January 2013, individuals with earned income of more than $200,000 ($250,000 for married couples filing jointly) pay an additional 0.9 percent in Medicare taxes. The tax rates shown above do not include the 0.9 percent.

Maximum Taxable Earnings:

2014

2015

Social Security (OASDI only)

$117,000

$118,500

Medicare (HI only)

N o   L i m i t

 

Quarter of Coverage:

2014

2015

 

$1,200

$1,220

 

Retirement Earnings Test Exempt Amounts:

2014

2015

Under full retirement age

NOTE: One dollar in benefits will be withheld for every $2 in earnings above the limit.

$15,480/yr.
($1,290/mo.)

$15,720/yr.
($1,310/mo.)

The year an individual reaches full retirement age

NOTE: Applies only to earnings for months prior to attaining full retirement age. One dollar in benefits will be withheld for every $3 in earnings above the limit.

There is no limit on earnings beginning the month an individual attains full retirement age.

$41,400/yr.
($3,450/mo.)

$41,880/yr.
($3,490/mo.)

 

Social Security Disability Thresholds:

2014

2015

Substantial Gainful Activity (SGA)
     Non-Blind
     Blind


$1,070/mo.
$1,800/mo.


$1,090/mo.
$1,820/mo.

Trial Work Period (TWP)

$770/mo.

$   780/mo.

 

Maximum Social Security Benefit:

2014

2015

Worker Retiring at Full Retirement Age

$2,642/mo.

$2,663/mo.

 

SSI Federal Payment Standard:

2014

2015

Individual

$721/mo.

$  733/mo.

Couple

$1,082/mo.

$1,100/mo.

 

SSI Resources Limits:

2014

2015

Individual

$2,000

$2,000

Couple

$3,000

$3,000

 

SSI Student Exclusion:

2014

2015

Monthly limit

$1,750

$1,780

Annual limit

$7,060

$7,180

 

Estimated Average Monthly Social Security Benefits Payable in January 2015:

Before
1.7% COLA

After
1.7% COLA

All Retired Workers

$1,306

$1,328

Aged Couple, Both Receiving Benefits

$2,140

$2,176

Widowed Mother and Two Children

$2,635

$2,680

Aged Widow(er) Alone

$1,253

$1,274

Disabled Worker, Spouse and One or More Children

$1,943

$1,976

All Disabled Workers

$1,146

$1,165

 

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