Changes to Social Security for 2013

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socialsecuritylg

socialsecurity2013 While Congress was busy discussing the fiscal cliff and the debt ceiling, some people may not have heard about the changes to Social Security for 2013.

This year will bring some new rules for taxpayers along with some bureaucratic changes to Social Security and the Social Security Administration. Here are 7 of the most important ones.

The End of the Payroll Tax Cut – One of the biggest changes – and the one that probably gets the most attention – is the end of the temporary payroll tax cut. Workers will now contribute the full 6.2 percent on earnings up to $113,700 to Social Security (it was 4.2 percent in 2011 and 2012), and many are seeing this as a tax increase when they can least afford it.

No More Paper Checks – On March 1, paper checks will no longer be mailed out to those receiving Social Security. Payments will have to be either direct deposited into a bank account or loaded onto a prepaid debit card.

Benefit Amount Increases – For a worker retiring at full retirement age, the maximum monthly payment increases to $2,533, up from $2,513 in 2012. Every recipient will see a boost in their monthly check of 1.7 percent.

Reduced Office Hours on Wednesdays – To save money and avoid paying overtime, Social Security offices will close at noon every Wednesday.

My Social Security Accounts – Online access to services is expanding with the launch of my Social Security account , giving workers simpler access to their payment history, earnings record, and any communications from the Social Security Administration.

Higher Taxable Income Cap – The maximum amount of earnings subject to Social Security taxes is now $113,700, up from $110,100 in 2012.

Higher Earnings Limit – Retirees between ages 62 and 66 who continue to work while collecting their benefits can earn up to $15,120 in 2013 (was $14,640 in 2012) before seeing any of their Social Security payment withheld. For every $2 over the earnings limit, $1 in benefits will be withheld. For people turning 66 this year the limit is $40,080, after which $1 of every $3 earned will be withheld.