Social Security has some changes that might apply to you this year. Here’s a view of a few of them:
Are you collecting Social Security benefits? If so, you’ll find that your check is a tad bigger than last year. The 3.6% boost is the first one since 2009. But don’t get too excited … higher Medicare Part B premiums could eat up a big chunk of that increase.
Higher taxable earnings
Are you in the higher income classification? Then expect to fork over more bucks for Social Security this year. The maximum amount of earnings subject to Social Security taxes has gone up to $110,100 from $106,800 last year.
The Temporary Payroll Tax Cut Continuation Act of 2011 extended the 2% payroll tax cut through February 29. But if you earn more than $18,350 in January and February 2012, you’ll pay a 2% Social Security tax on the amount you earn between $18,350 and $110,100.
You can earn more
If you still work and started collecting retirement benefits before your full retirement age, you can earn $480 more this year before part of your Social Security will be temporally withheld. That means you can earn up to $14,640 in 2012. After that 50 cents of each dollar earned will be withheld from your Social Security payments. And if you turn 66 this year, the limit climbs to $38,880, after which 33 cents of each dollar earned will be deducted from monthly payments.
Then starting the month you hit your retirement age, there is no penalty for working and collecting Social Security benefits at the same time. Your benefit will also be adjusted to reflect your continued work record and any benefits that were withheld.
You might get more
The maximum possible Social Security check will grow to $2,513 per month in 2012, up from $2,366 in 2011. To receive this amount, you would need to have earned the maximum taxable amount ($110,100 in 2012) every year after age 21.
To read about more changes, click here.