It’s that time of year again. The new 2020 program rates and limits have been updated. Here are some updates that may affect you.
Cost of Living Adjustment (COLA) is 1.6%. If you’re already entitled you should have received your electronic notification of your new rate in your messages on your ‘my Social Security account’.
Maximum Taxable Earning are 137,700. You will not have any SSA payroll taxes deducted from your pay once your earnings exceed this amount. Medicare taxes have no limit.
Earnings Test Annual Exempt Amount is 18,240 if you are under your full retirement age. You can work and earn up to this amount annually and have no affect on your retirement check. If this is the year you are attaining your full retirement age, you can earn up to 48,600 for months before your attainment.
Tax Rates for Social Security will be 6.20% and Medicare 1.45%. Self-employed persons pay 12.4% in SSA taxes and 2.9% in Medicare taxes.
Earnings required for one work credit is 1,410 with a maximum of 5,640 for the total four credits within the year. Work credits are how SSA calculates your benefit. You must have at least 40 work
credits to qualify for retirement benefits. Maximum monthly SSA benefit is now 3,011. This rate of payment is obtained by maxing your taxable wages annually over your lifetime.
If you have questions about this update, please feel free to reach out for any clarification.
Happy Holidays!
Maryellen Eckert
SSA Claims Specialist
