Many changes are coming to Social Security benefits in 2015 that will give retirees larger checks and benefit statements for some workers, according to US News.
Next year, Social Security recipients will receive 1.7% larger checks due to a cost-of-living adjustment. This will result in an average of $22 more per month for the average retiree, increasing the average monthly benefit to $1,328. The average benefit for retired couples both receiving Social Security will increase to $2,176, rising about $36 per month.
The cost-of-living index is determined by a change in the government’s Consumer Price Index for Urban Wage Earners and Clerical Workers. Social Security benefits are automatically adjusted each year to keep up with inflation. The highest cost-of-living adjustment in the history of Social Security was 14.3% in 1980.
Maximum benefits will also increase in 2015. The maximum possible Social Security payment for workers who sign up for benefits at full retirement age will increase by $21 to $2,663 next year. This increase is predicted to affect about 64 million people.
Beginning in January, the maximum taxable earnings will also increase from $117,000 to $118,500, which means most works will pay 6.2% of every paycheck in Social Security taxes until reaching this cap. This change will affect about 10 million of the 168 million people who pay into Social Security. Earnings beyond this cap are not subject to Social Security taxes and are not considered for future Social Security benefits.
Larger earnings limits will also be updated. Social Security beneficiaries under the age of 66 can earn up to $15,720 next year before $1 in benefits is withheld for every $2 earned above the cap. Retirees who turn 66 next year and have signed up for benefits can earn up to $41,880 before $1 will be withheld for every $3 earned above the limit. After a retiree turns 66, there is no limit on earnings and benefits are recalculated to provide the retiree with credit for previous withheld benefits.
Between 1999 and 2011, annual paper Social Security statements were mailed to all workers aged 25 and older. This was suspended in 2011 to save money. Workers who will turn 25, 30, 35, 40, 45, 50, 55 or 60 in 2015 and do not have an online Social Security account can expect to receive a paper statement next year listing earnings history, paid taxes and expect benefits about three months before their birthday.