Social Security Benefits
Social Security Announces 3.3 Percent Benefit Increase for 2007
Monthly Social Security and Supplemental Security Income benefits for more than 53 million Americans will increase 3.3 percent in 2007, the Social Security Administration announced today.
Social Security and Supplemental Security Income benefits increase automatically each year based on the rise in the Bureau of Labor Statistics' Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), from the third quarter of the prior year to the corresponding period of the current year. This year's increase in the CPI-W was 3.3 percent.
The 3.3 percent Cost-of-Living Adjustment (COLA) will begin with benefits that nearly 49 million Social Security beneficiaries receive in January 2007. Increased payments to more than 7 million Supplemental Security Income beneficiaries will begin on December 29.
Some other changes that take effect in January of each year are based on the increase in average wages. Based on that increase, the maximum amount of earnings subject to the Social Security tax (taxable maximum) will increase to $97,500 from $94,200. Of the estimated 163 million workers who will pay Social Security taxes in 2007, about 11 million will pay higher taxes as a result of the increase in the taxable maximum in 2007.
Cost-of-Living Adjustment (COLA):
Based on the increase in the Consumer Price Index (CPI-W) from the third quarter of 2005 through the third quarter of 2006, Social Security and Supplemental Security Income (SSI) beneficiaries will receive a 3.3 percent COLA for 2007. Other important 2007 Social Security information is as follows:
| Tax Rate | 2006 | 2007 | | Employee | 7.65% | 7.65% | | Self-Employed | 15.30% | 15.30% | | NOTE: The 7.65% tax rate is the combined rate for Social Security and Medicare. The Social Security portion (OASDI) is 6.20% on earnings up to the applicable taxable maximum amount (see below). The Medicare portion (HI) is 1.45% on all earnings. |
| Maximum Earnings Taxable: | 2006 | 2007 | | | $94,200 | $97,500 | | Medicare (HI only) | No Limit |
| Retirement Earnings Test Exempt Amounts: | 2006 | 2007 | | Under full retirement age
NOTE: One dollar in benefits will be withheld for every $2 in earnings above the limit. | $12,480/yr.
($1,040/mo.) | $12,960/yr.
($1,080/mo.) | The year an individual reaches full retirement age
NOTE: Applies only to earnings for months prior to attaining full retirement age. One dollar in benefits will be withheld for every $3 in earnings above the limit. | $33,240/yr.
($2,770/mo.) | $34,440/yr.
($2,870/mo.) | | There is no limit on earnings beginning the month an individual attains full retirement age (65 and 8 months for retirees born in 1941; 65 and 10 months for those born in 1942). |
| Social Security Disability Thresholds: | 2006 | 2007 | | Substantial Gainful Activity (SGA) | Non-Blind | $ 860/mo. | $ 900/mo. | | Blind | $1,450/mo. | $1,500/mo. | | Trial Work Period (TWP) | $ 620/mo. | $ 640/mo. |
Maximum Social Security Benefit:
Worker Retiring at Full Retirement Age in | 2006
| 2007
| | NOTE: For retirees born in 1941, full retirement age is 65 and 8 months; for those born in 1942, it is 65 and 10 months. Full retirement age will gradually increase to age 67 for those born in 1960 and later. | $2,053/mo.
(Age 65 and 8 months) | $2,116/mo.
(Age 65 and 10 months) |
| SSI Resources Limits: | 2006 | 2007 | | Individual | $2,000 | $2,000 | | Couple | $3,000 | $3,000 |
| Estimated Average Monthly Social Security Benefits Payable in January 2007: | Before
3.3% COLA | After
3.3% COLA | | All Retired Workers | $1,011 | $1,044 | | Aged Couple, Both Receiving Benefits | $1,658 | $1,713 | | Widowed Mother and Two Children | $2,098 | $2,167 | | Aged Widow(er) Alone | $ 976 | $1,008 | | Disabled Worker, Spouse and
One or More Children | $1,593 | $1,646 | | All Disabled Workers | $ 947 | $ 979 | Browse all of Credit Federal government resources, as well as free government grants and assistance programs.
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