Changes in Social Security in 2020

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A new year often brings slight changes to some of the most popular programs in the United States, and Social Security is no exception.

The amount that each beneficiary should expect to receive in 2020 will be slightly higher (like many years), after inflation adjustments. And taxes can affect different sectors of the population.

The program is an important part of many people’s retirement plans, as 10,000 baby boomers turn 65 every day in the US. UU.

The reinforcement of the program has become a focus on Capitol Hill as Social Security reserve funds are expected to run out in 2035, at which time the program will no longer be able to pay benefits in full.

But in 2020, here is a look at some of the changes that can affect you:

SOCIAL SECURITY FIXED DEMOCRATS ARE IMPOSED IN THE TAX THE RICH PROPOSALS

SOCIAL SECURITY BENEFITS ESTABLISHED FOR LEVES BUMP IN 2020

Cost of living adjustment

The Social Security Administration announced in October that benefits would increase by 1.6 percent in 2020.

For a beneficiary who earns $ 1,479, the average monthly benefit among all retired workers, checks will increase to approximately $ 1,503 per month.

The cost of living adjustments, which began in 1975, are implemented to counteract the effects of inflation.

Maximum profit

The maximum Social Security benefit for a worker who retires at full retirement age will increase to $ 3,011 per month in 2020, from $ 2,861 per month last year.

Taxes

For employees, the tax rate remains stable at 7.65 percent (a combined rate for Social Security and Medicare).

Maximum taxable profits in 2020 increased to $ 137,700, from $ 132,900 in 2019.

Earnings above that level are not subject to tax.

Proof of retirement earnings exempt amounts

The retirement income test applies to those who claim Social Security while still working. The test takes into account two main factors: your age and income.

In one scenario, the retirement earnings test withholds benefits before you reach full retirement age if your income exceeds a certain threshold, and then adds them again once you reach full retirement age.

That limit amount for 2020 is $ 18,240.

A higher threshold applies to those who will reach full retirement age during the year. By 2020 it is $ 48,600. The program withholds $ 1 in benefits for every $ 2 of earnings in excess of the lowest exemption amount, and $ 1 for every $ 3 in excess of the highest exemption amount.

The full retirement age is 66 years for people born between 1943 and 1954. It is 67 years for people born in 1960 or later.

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