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Social Security Announces 1.6% Benefit Increase for 2020

Retirement Income

The Social Security Administration (SSA) on Oct. 10 announced that the monthly Social Security and Supplemental Security Income (SSI) benefits will increase 1.6% in 2020. The change will affect nearly 69 million Americans.

The 1.6% cost-of-living adjustment (COLA) will begin with benefits payable to more than 63 million Social Security beneficiaries in January 2020. Increased payments to more than 8 million SSI beneficiaries will begin on Dec. 31, 2019.

Based on the increase in average wages, the maximum amount of earnings subject to the Social Security tax (taxable maximum) will increase to $137,700 from $132,900.

The earnings limit for workers who are younger than “full” retirement age will increase to $18,240. SSA notes that $1 in benefits will be withheld for each $2 earned over $18,240.

The earnings limit for people reaching full retirement age in 2020 will increase to $48,600, up from $46,920 in 2019. Here, SSA says that $1 will be deducted from benefits for each $3 earned over $48,600 until the month the worker reaches full retirement age. There is no limit on earnings for workers who are in “full” retirement age or older for the entire year.

More detailed information about the changes relevant to Social Security benefits in 2020 is available here.

The IRS has not yet announced the official 2020 limits for retirement and other benefit-related purposes, but it should be doing so in the near future.

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