Social
Security checks going up 4.1%
Also
going up 4.1% are the wages subject to payrolls taxes.
October 14, 2005: 12:53 PM EDT
NEW
YORK (CNN/Money) – More than 52 million recipients of Social Security
and supplemental benefits will see a 4.1 percent bump in their monthly
payments come 2006, the Social Security Administration said Friday.
The
average retiree who receives Social Security will see his payment
increase from $963 a month to $1,002. The maximum monthly benefit
any retiree over 65 may receive will rise from $1,939 to $2,053.
The
2006 cost-of-living-adjustment (COLA), the largest since 1991, is
based on the change in the Consumer Price Index from the third quarter
of the prior year to the third quarter of the current year. The
CPI for September was released on Friday. (Full
story).
The
4.1 percent COLA will also raise the level of wages subject to the
Social Security tax. The new wage level next year will be $94,200,
up from $90,000 this year. That means the first $94,200 will be
subject to the 12.4 percent Social Security tax, half of which is
paid by workers and half by their employers. The self-employed pay
the full 12.4 percent but may deduct half of that on their federal
taxes.
As
a result of the wage-level increase, 11.3 million workers, or 7.1
percent of workers who pay Social Security taxes, will be paying
more next year as a result of the increase.
Have
you fought back against your health insurer - and won? If so, Money
magazine would like to speak with you for an upcoming story about
appealing health insurance rejections. E-mail cweisser@moneymail.com
with your story.
