1.5% COLA for 2014 Announced / Impact Outlined
As anticipated, the Social Security Administration (SSA) announced today that the 2014 cost-of-living adjustment (COLA) will increase 1.5 percent in 2014 for nearly 63 million Americans. The 1.5 percent COLA reflects an increase in the Consumer Price Index (CPI-W) from the third quarter of 2012 through the third quarter of 2013.
Here is information related to other important 2014 Social Security topics, which SSA outlines on their Fact Sheet:
- Tax Rate: Remains unchanged from 2013 to 2014 (7.65% for employees / 15.30% for self-employed).
- Maximum Taxable Earnings: The maximum taxable earnings for Social Security (OASDI only) will increase from $113,700 in 2013 to $117,000 in 2014. The SSA projects that approximately 10 million out of the 165 million workers who pay Social Security taxes will pay higher taxes as a result of this change. Note, there continues to be no maximum taxable earnings for Medicare.
- Quarter of Coverage: The amount of earnings needed to earn a quarter of coverage is increasing from $1,160 in 2013 to $1,200 in 2014. Quarters of coverage are required to obtain insured status for retirement and disability benefits.
- Substantial Gainful Activity (SGA): The monthly SGA threshold for the non-blind will increase from $1,040 in 2013 to $1,070 in 2014, and will increase from $1,740 in 2013 to $1,800 in 2014 for the blind. Individuals making under SGA are eligible to apply for disability benefits.
- Trial Work Period (TWP): The monthly TWP threshold is increasing from $750 in 2013 to $770 in 2014. Any month where a beneficiary earns more than this amount ($770 in 2014) will be counted towards their nine month trial work period.
- Estimated Average Monthly Social Security Benefits Payable in 2014: The average SSDI benefit amount for all disabled workers will increase from $1,131 in 2013 to $1,148 in 2014. The average SSDI benefit amount for a disabled worker and their dependents will increase from $1,914 in 2013 to $1,943 in 2014.
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