Who Is Affected By Social Security Changes?
Changes have occurred to Social Security throughout the years, sometimes by newly signed laws, sometimes by a schedule established with predictable dollar amounts and time frames to be enforced in the future.
Are There Changes in Social Security Benefits in 2019?
All retirees already receiving Social Security benefits, and future retirees still in the workforce are subject to new rules.
In 2019, the most notable change for most retirees is the 2.8% Cost of Living Adjustment (COLA). This is the biggest increase in benefits since 2012 when the increase was 3.6%. There is not an increase in benefits every year. In 2016, 2011, and 2010 there was no increase.
Another change is the raising of full retirement age. Full retirement age in 2018 was 66 years and four months. In 2019 that will increase to 66 years and six months. Full retirement age is scheduled to increase by two months every year until 2022 when age 67 will become full retirement age.
The full retirement age for people born in the following years are:
- Born in 1955, age 66 years and 2 months
- Born in 1956, age 66 years and 4 months
- Born in 1957, age 66 years and 6 months
- Born in 1958, age 66 years and 8 months
Any person may still draw Social Security benefits at age 62 but will receive a reduced benefit that is locked in for life.
FICA taxes are divided into two components. The Social Security portion is 6.2%. The Medicare portion is 1.45%. The maximum taxable earnings for the 6.2% rate will increase to $132,900 in 2019. It was $128,400 in 2018.
The Medicare portion will be a 1.45% tax rate on earnings up to $200,000 for individuals filing single. On earnings above $200,000 the Medicare tax rate increases to 2.35%. For married couples filing jointly, this amount is $250,000. This split has been in effect since 2013. In the year 2012, and earlier years, the rate was 1.45% for all earnings.
You may apply to begin receiving regular Social Security benefits at age 62 at the Social Security website.
Official Social Security Website: https://www.ssa.gov
SSA Fact Sheet: https://www.ssa.gov/news/press/factsheets/colafacts2019.pdf
Six Changes: https://www.investopedia.com/retirement/social-security-changes