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Every year the Social Security Administration updates many key figures within their system. With the New Year starting, now is a good time to review the updates for 2017. These figures, and more, can be found at https://www.ssa.gov/news/press/factsheets/colafacts2017.pdf.
1. COLA
Social Security benefits will receive a cost-of-living adjustment (COLA) for 2017 in the amount of 0.3%… Anemic by any measure, but better than the 0% we saw for 2016. These increases will be seen in all benefits paid starting in January.
2. Maximum Taxable Earnings
Maximum Taxable Earnings will increase from $118,500 to $127,200. This is the limit on a person’s earnings that are subject to the 6.2% withholding for Social Security. The total withheld is actually 12.4%, but if you are not self-employed your employer pays half.
3. Quarters of Coverage
To earn a Quarter of Coverage you will need to earn $1,300, which is up from $1,260 in 2016. You need to earn 40 quarters of coverage to be eligible for SS retirement benefits. Since you can earn no more than 4 per year it takes at least 10 years of gainful employment to qualify for this benefit.
4. Earnings Test
Earning Test Exempt amount increases to $16,920 from $15,720 in 2016. This test is applied if you are collecting SS benefits prior to your full retirement age (FRA). Your benefit will be decreased by $1 for every $2 earned above this limit. This limit goes away the month you reach FRA.
5. Maximum Retirement Benefit
Maximum SS Retirement benefit at FRA will be $2,687/month. This is the maximum FRA retirement benefit a person can earn if they had at least 35 years of earnings at or above the maximum taxable limit. Very few people earn a benefit this high, with the average being about $1,360/month.
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