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Social Security rising 1.5%

By Jennie L. Phipps · Bankrate.com
Wednesday, October 30, 2013
Posted: 3 pm ET

Social Security confirmed today that the average cost of living adjustment, or COLA, will be 1.5 percent in 2014 -- one of the lowest increases since the program was first adjusted for inflation in 1975.

To put this in perspective: In 1987 and 1999, the COLA was only 1.3 percent. There was no adjustment in either 2010 or 2011. The largest adjustment was in July 1980, when inflation drove up benefits 14.3 percent.

The average Social Security payment for an individual will rise $19 a month from $1,275 to $1,294. The average couple will get $31 more, their benefit rising from $2,080 to $2,111.

In some years, the Social Security increase brought about by the COLA was eaten up by an increase in Medicare Part B, which automatically is subtracted from most people's Social Security payments. In 2014, Medicare Part B, which covers doctor's office visits, won't rise from its current level of $104.90. That's good retirement planning news.

If you are strictly on the paying end of this and not yet ready for retirement, maximum taxable earnings on which Social Security payroll taxes are levied will rise in 2014 to $117,000, up from $113,700 in 2013. To qualify for Social Security, you must work a total of 40 quarters, earning at least $1,200 a quarter in 2014, up from $1,160 in 2013.

If you are between 62 and full retirement age -- 66 for people turning 62 in 2014 -- and you continue to work while claiming, you will have to pay back a portion of your Social Security payments if you earn more than $15,480 in 2014. That's up from $15,120 a year in 2013. The year that you reach full retirement age, you can earn as much as $41,400 without penalty, an increase of $1,320 from 2013.

The COLA also affects benefits for federal government retirees, disabled veterans and people who get Supplemental Security Income, the disability program for the poor.

Opposition to proposed COLA changes

Many organizations supporting improvements to Social Security are using today's announcement as an opportunity to explain why they think this year's COLA is unfair to middle-income people who are dependent on the program. They are particularly opposed to proposals to adopt the Chained Consumer Price Index, or Chained CPI, which would further reduce Social Security COLAs. A poll released by Democracy for America says that people across the political spectrum reject the Chained CPI, with 74 percent opposing it in red states like Kentucky; 64 percent against it in blue states like Hawaii; and 70 percent opposing it in swing or purple states like Iowa.

Another survey by the Senior Citizens League says that more than 78 percent of people older than 65 either favor, or somewhat favor, requiring workers with incomes higher than $117,000 in 2014 to pay Social Security taxes on all of their wages. If that were the case -- and people making more than $117,000 received no additional benefit from their additional taxes, the Social Security's Office of the Chief Actuary says the deficit would disappear. If there were no maximum earnings cap and additional benefits were paid to high earners, about 43 percent of the shortfall would be eliminated.

If we raised the cap on Social Security taxable income, how much -- if any -- additional Social Security benefits should be allocated to people who earn more than $117,000 a year? Or should this be a straight tax increase with no benefit increase to high earners?

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102 Comments
Alan Bartley
November 07, 2013 at 5:54 pm

They promised us a 3.6% cola to bring us up to date for the rise in inflation, and the lost of income for the two years we didn't get a cola , because of Obumma cutting it. Just keep on electing vile, lying,liberals. Isaiah 32.

Millie
November 07, 2013 at 5:50 pm

I worked and paid into the Social Security Fund almost 45 years. As a retiree, social security represents the major part of my income. I would gladly 'make do' without any increase if it would help our country to become solvent. Our greatest need is for government to stop excessive spending and focus on growing the economy which would create jobs so able-bodied people could be working to support their families and paying taxes. My greatest concern is that future generations will have to live on much less as they pay for the problems we've created. Hopefully, someday problems will be solved by working together without regard to political views.

Alan Bartley
November 07, 2013 at 5:49 pm

What happened to the 3.6 % cola we were promised this year(2014).Who cut it to 1.5%? Obumma!

Norman L. Corbin
November 07, 2013 at 4:59 pm

If our government would stop giveing our money to other countries and sending our food to other countries, and stop sending our military forces to other countries AND GET THE OLD, USELESS, SELF-SERVING, SELF-CENTERED AND FEEBLE-MINDED Congress crackpots out of office and replace them with fresh ideas and forward looking congresspersons our country just might survive!!! Thirty, forty, forty-five and older office holders it is time to get rif of them.

ruben
November 07, 2013 at 4:29 pm

politics more honest?? really when has politicians being honest?? all they care about is to fill their pockets and their friend's pockets with our money ,and the go crying about the funds running low, when they are the ones doing all the spending, on top of that they can collect their paychecks even after they retire, greed, hypocrites, that's what they are, and they vote themselves raises whenever they feel like it,,

tony c
November 07, 2013 at 2:22 pm

all the government wants is to mess with entitlements. social security, disability, medicare,etc... in the end they want the money for their projects or their pockets. I agree. cut out all the programs. however, give back all the money you collected from peoples paychecks (the ones that worked all their lives) when you do.problem solved.then you can start working on taking the food off our tables. sorry, you are already doing that

Mercedes
November 07, 2013 at 2:11 pm

Katherine Lunbery, I couldn't had said it better myself! People should educated themselves before opening their mouth and have hot air coming out of it!

Charlie Keaton
November 07, 2013 at 2:04 pm

There are a lot of comments and complaining being type about the President and many other problem. The President is just a man. Man can't do nothing unless GOD aloud. Stop depending upon man, man will let you down. Start depending upon GOD and I promise you he never fell. Too much sin is in this world, stop taking GOD out of everything, and what so ever that we do with GOD in it the world will be a better place.

katherine lunbery
November 07, 2013 at 1:59 pm

this is for the "person" that asked-"why do seniors need a cost of living raise-they don't work"?..--are you for real?either you just fell off the turnip truck-or you have never worked for a living..no.1-as soon as you turn of age to work-(maybe 16 or ?)-uncle sam takes about a quarter of what you earn...these seniors have worked 50-60 yrs.,& paid in to the gov.no.2-they are ENTITLED to what they have spent most of their life working for social security..period.they were working way before you were born!i don't see your comment now-& maybe they took it off.,rightly so...so educate yourself-before you start shooting your mouth off about something you don't have a clue about!!!!

larry
November 07, 2013 at 1:30 pm

Let it be known that History repeats itself, and if America does not stop working with the respect of what GOD has intended us to do like our forefather did, we all are going to pay for it dearly. What I'm trying to say is GREED put ROME down and any other nation. We need politics to be MORE HONEST and do their work as they were hired for. WE THE PEOPLE, not me the people first!! May God put politics back to fairness and no lies to the people who put them in office in the first place.. Majority rules, and I pray that they realize what wrong they are doing.