Social security is an essential social program within this country that is used by millions upon millions of Americans. Whether you’re currently a recipient of this program or are about to qualify for benefits, you’ll want to know about the changes to this program for 2019, of which there are a variety that may apply to you.
How Does This Program Work?
Social security is a type of social program wherein individuals who have paid taxes over the years can obtain monthly benefits. The amount of taxes that you pay as an adult determine how substantial your monthly checks will be. The income that you’re set to receive from this social program will usually kick in upon your retirement. However, the program is also available for widowers or widows above the age of 60, disabled workers, and widowed mothers with children.
The amount of income that a person receives also depends on when they retire. A person can receive the maximum amount of benefits if they apply for those benefits upon reaching full retirement age, which is usually around 66 years old. However, you can start receiving this income at 62 years old. The maximum amount that an individual can currently earn per month if retiring at the full retirement age is just under $2,800.
Primary Changes With Social Security in 2019
There are some substantial changes that are set to occur with this program in 2019, the primary of which is a standard cost-of-living adjustment that takes rising costs into account. Recipients of benefits from this program will see an increase of 2.8 percent for their monthly benefits starting in January. The average monthly check for SSI is right around $1,422, which means that these new changes would cause an increase to $1,461 per month. Keep in mind that this is the largest cost-of-living adjustment in around seven years. The main reason for such a large increase is because of the rising prices of fuel oil and gasoline.
The maximum monthly payout that you can receive at full retirement age has also increased slightly this year. Anyone who retired at full retirement age in 2018 could receive monthly income as high as $2,788. For this year, the maximum monthly income has increased by $73 to $2,861 per month, which is a yearly increase of $876. You should also expect the full retirement age to increase, which means that some people will need to wait slightly longer to obtain maximum benefits. For 2018, the full retirement age was at 66 years and four months, which is expected to increase to 66 years and six months this year. Accepting benefits before you reach full retirement age means that you’ll receive a permanent reduction in your benefits compared to what you would receive at full retirement age.
Another change that you should be aware of is an increase in the amount that you can earn without receiving a deduction in your benefits. If you selected to receive your monthly benefits before hitting your full retirement age in 2018, you could still earn just over $17,000 per year in additional income without having any of your benefits withheld. The amount for this year has risen to $17,640. Keep in mind that any benefits that are withheld will be returned to you in a higher payout when you eventually reach your full retirement age. Income thresholds for disabled individuals are also going to be increasing this year. For this year, any non-blind SSD recipients can earn as much as $1,220 per month without having some of their benefits withheld, which is an increase of $40 per month from last year. Those who are legally blind can earn as much as $2,040, which is around $70 higher than it was last year.
The final change that you should know about is that actually qualifying for SSI is somewhat more difficult this year than it has been in the past. In order to qualify for this social program, you’ll need to earn 40 lifetime work credits, which are based on how much you earn and pay in taxes each year. You can earn a maximum of four credits each year, which means that it would take ten years of earning four credits to qualify for SSI. In 2018, a single credit was obtained for every $1,320 in income until you received four credits. This year, a single credit is obtained for every $1,360 in income.