The Social Security Administration announced that benefits will increase by 2.8% in 2019. That is the largest cost-of-living adjustment since 2012.
The estimated average monthly Social Security benefit payable in January 2019 will increase from $1,422 in 2018 to $1,461. The average monthly benefit for a couple who are both receiving benefits will rise from $2,381 to $2,448. And the maximum Social Security benefit for a worker retiring at full retirement age will increase from $2,788 per month to $2,861.
Also, more of workers’ income will be subject to the Social Security tax in 2019. The Social Security tax will apply to the first $132,900 of earnings, up from $128,400 in 2018.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The COLA is based on the increase in the Consumer Price Index (CPI-W) from the third quarter of 2017 through the third quarter of 2018. Rising gas prices during the third quarter of 2018 fueled a rise in the inflation rate, leading to a higher COLA than in recent years. The COLA was 2.0% in 2018, 0.3% in 2017, 0.0% in 2016, and 1.7% in 2015. You usually receive a notice in the mail in early December with your new benefit amount, but this year most Social Security beneficiaries will also be able to see their COLA notice online through their mySocialSecurity account. (You can sign up for the account at ssa.gov/myaccount.)
If you have your Medicare premiums paid directly from your Social Security benefits, you’ll find out your new benefit amount after 2019 Medicare premiums are announced (usually in November). You’ll receive that information in the COLA notice that is mailed in December, and you can also find it at the mySocialSecurity Message Center.
The Social Security Administration also announced that it is raising the amount that retirement beneficiaries who are still working can earn in 2019 before seeing a temporary reduction in benefits. Workers who are younger than full retirement age (age 66 for people born in 1943 through 1954) will be able to earn up to $17,640 in 2019 – up from $17,040 in 2018 – before Social Security starts to withhold benefits. Social Security will withhold $1 in benefits for every $2 in earnings above that limit for workers receiving benefits before full retirement age.
The earnings limit for people turning 66 in 2019 will increase from $45,360 to $46,920. Social Security will withhold $1 from benefits for each $3 earned over that limit until the month the worker turns 66. There is no earnings test after workers reach full retirement age. And once they reach full retirement age, Social Security will adjust their benefits to account for the benefits that were withheld.
For more information about how the earnings test affects benefits, see Passing the Social Security Benefits Earnings Test.
For more information about the COLA and its history since 1975, see the Social Security Administration’s COLA page.
-
Here's How To Get Organized And Work For YourselfWhether you’re looking for a side gig or planning to start your own business, it has never been easier to strike out on your own. Here is our guide to navigating working for yourself.
-
How to Manage Risk With Diversification"Don't put all your eggs in one basket" means different things to different investors. Here's how to manage your risk with portfolio diversification.
-
Young Professionals Could Avoid Six Figures in Lifetime Taxes With an HSAhealth savings accounts Running the numbers shows how health savings accounts could save one couple $160,000 in taxes. With open enrollment coming up, millions of workers should consider this tool’s benefits.
-
Answers to Frequently Asked Social Security Disability Questionspersonal finance Social Security Disability Insurance is there to help those who can’t work, but getting the benefits you need can be confusing and difficult. Read on for answers to some of the most common SSDI questions.
-
3 Main Reasons Why the Government Denies Social Security Disability Benefitspersonal finance To help improve your chances at being approved for SSDI benefits, it helps to better understand why so many applicants get turned down.
-
Social Security Disability for COVID Long Haulers Explainedsocial security Social Security Disability Income (SSDI) is available for American workers who are struggling with a disability, including long COVID. Here are some tips on how to apply and what to expect.
-
Understanding SSDI and VA Income Options for Veterans with Disabilitiespersonal finance For the millions of veterans struggling to make ends meet due to an injury or illness related to their service, there is help out there. But you’ve got to know where to look and what you may be entitled to.
-
No Need to Panic: Social Security Is NOT Running Outsocial security Yes, Social Security is undergoing some changes, including a possible reduction in benefits in the not-too-distant future – but the checks won’t stop coming. Here’s why the program is changing and what to expect.
-
3 Ways You’re Just Plain Wrong about SSDI Benefitssocial security It’s time to stomp out the stigmas surrounding Social Security Disability Insurance. Let’s start with these three myths that too many people believe.
-
SSDI and COVID-19: How to Apply for Disability Benefits Nowpersonal finance The long-term physical effects of COVID-19 are still being discovered. If you’re thinking of applying for Social Security disability benefits, here are some things to know about the process and how COVID has made it more challenging in some ways.
