5 social security changes are coming for 2019

Matthew Frankel, CFP, for The Motley FoolPublished 3:11 p.m. ET Nov. 27, 2018

We recently learned that Social Security beneficiaries are getting a 2.8% cost-of-living adjustment, or COLA, for 2019. However, that’s just one of several Social Security changes that were announced in October that are tied to rising prices.

For workers, Social Security’s maximum taxable earnings are increasing, and more income will be required to earn a Social Security “credit.” Beneficiaries who claimed Social Security early and still work will be happy to learn they’ll be able to earn more without a benefit reduction in 2019, and for high earners, the maximum possible Social Security benefit is also on the rise.

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

Beneficiaries are getting a raise

Beneficiaries are getting a raise (Photo: Getty Images)

Beneficiaries are getting a raise

As I mentioned, Social Security beneficiaries are getting a 2.8% COLA starting with their Jan. 2019 benefit payment. The Social Security Administration, or SSA, estimates that the average benefit paid to all retired workers will increase from $1,422 to $1,461 as a result.

Medicare recently released its Part B premium changes for 2019, and it’s good news for determining beneficiaries effective COLA. The Part B monthly premium will see a modest increase of only $1.50 per month.

Social Security’s maximum taxable earnings are rising

Each year, Social Security tax is assessed at a rate of 6.2% for employers and employees, but only on earnings up to a certain threshold. This is known as the Social Security maximum taxable earnings.

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

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

THANKS TO: https://www.usatoday.com/story/sponsor-story/motley-fool/2018/11/27/its-official-these-5-social-security-changes-coming-2019/2121041002/

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