On October 22, 2014, the Social Security Administration announced that a cost of living adjustment of 1.7% will go into effect on January 1, 2015.
The increase will apply to disability insurance benefits and supplemental security income (SSI) as well as retirement benefits.
The monthly maximum SSI benefit for an individual will increase from $721 in 2014 to $733 in 2015.
Another notable change on January 1, 2015, is an increase in the maximum amount of earnings subject to the Social Security tax from $117,000 to $118,500.
The Social Security tax rate is current 6.2%. Taxes for Social Security are part of FICA taxes deducted from each paycheck. Note: employees pay 6.2% and employers pay an additional 6.2%, for a total of 12.4%; self-employed individuals pay the entire 12.4%.
If you earn $117,000 per year or less, 6.2% of your paycheck is taxed and paid into the Social Security system (labeled FICA on your check). FICA taxes fund Social Security retirement and disability benefits.
Any income over and above $117,000 is not subject to this 6.2% tax. Yet every citizen, regardless of financial status, is entitled to receive Social Security benefits.
Taxing income above $117,000 would ensure that Social Security benefit levels are not cut in the future and will continue to help keep thousands of elderly and disabled individuals out of poverty.
As election day approaches (November 4), consider asking candidates for Congress the following question:
What justification exists for giving high wage earners a tax break on their income above $117,000 when doing so will lead to future benefit cuts for workers who paid into the Social Security system their entire lives and who are depending on those benefits for a secure retirement (or to protect them in the event of a disabling injury or illness)?