The nation's elderly and disabled Social Security recipients will receive a 1.5 percent increase in payments in 2014. This is expected to raise the average monthly payment for the typical retired worker by $19. The increase is even less than last year’s 1.7 percent cost-of-living adjustment (COLA). The same COLA will apply to pensions for federal government retirees and most veterans.
But this year the scant rise will not be partially offset by a Medicare premium increase because the standard Medicare Part B monthly premium will be $104.90 in 2014, the same as it was in 2013. Most Medicare recipients have their premiums deducted from their Social Security payments.
The COLA by the Numbers
Starting in January 2014, the average monthly Social Security retirement payment will rise from $1,275 to $1,294 a month for individuals and from $2,080 to $2,111 for couples. The 1.5 percent increase will apply to both elderly and disabled Social Security recipients, and individuals who receive both disability and retirement Social Security will see increases in both types of benefits. The maximum Social Security benefit for a worker retiring at full retirement age, which is age 66 for those born between 1943 and 1954, will be $2,642 a month.
The Social Security COLA also raises the maximum amount of earnings subject to Social Security taxation to $117,000 from $113,700. This means that those earning incomes above $117,000 will pay no tax on any income above that threshold.
The COLA increases the amount early retirees can earn without seeing a cut in their Social Security checks. Although there is no limit on outside earnings beginning the month an individual attains full retirement age, those who choose to begin receiving Social Security benefits before their full retirement age may have their benefits reduced, depending on how much other income they earn.
Early beneficiaries who will reach their full retirement age after 2014 may now earn $15,480 a year before Social Security payments are reduced by $1 for every $2 earned above the limit. Those early beneficiaries who will attain their full retirement age in 2014 will have their benefits reduced $1 for every $3 earned if their income exceeds $41,400 in the months prior to the month they reach their full retirement age.
For 2014, the monthly federal Supplemental Security Income (SSI) payment standard will be $721 for an individual and $1,082 for a couple.
For a complete list of the 2014 Social Security changes, go to: http://www.ssa.gov/pressoffice/factsheets/colafacts2014.html
For more ElderLawAnswers information on Social Security, click here.