There is good news if you receive Social Security. You are getting a 1.5% pay raise. There is bad news if you are a taxpayer earnings much more than $100,000. Your income adjustment for Social Security goes up more than 1.5%.
The Social Security department released its cost-of-living adjustment, or COLA, for 2014. The gain is 1.5% for 2014. The benefits apply to nearly 63 million Americans. The 1.5% COLA will begin with benefits that more than 57 million Social Security beneficiaries receive in January 2014. Increased payments to more than 8 million SSI beneficiaries will begin on December 31, 2013.
Where the gain is countered is that it comes out of the higher earners’ wallets. Based on an increase in wages, the new maximum amount of earnings subject to the Social Security taxable maximum will rise to $117,000 from $113,700 currently. The report projects that about 10 million of the estimated 165 million workers will pay higher taxes as a result of the increase in the taxable maximum.
The good news for the bulk of taxpayers that it is a 1.5% adjustment higher. This raises the income threshold on Social Security by 2.9% on what the government considers as higher earners.
Here is a history of the cost-of-living adjustments from the Social Security Administration:
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