Would you be able to survive on $1,413 a month?
The most recent data from the Social Security Administration (SSA) says that was the average monthly Social Security benefit for a retired worker in June 2018.
That’s not a lot of money, but sadly it’s the lion’s share of monthly income for about 21% of married retired couples and 44% of retired elderly individuals.
If Social Security is important in your life — or the life of someone you love — you should know about some key changes that will be made to the program coming in 2019.
Here are the basic changes to Social Security in 2019
The Social Security system is one of those things that evolves and changes every year. Here’s the latest…
1. The cost-of-living adjustment for 2019 will be the biggest in 7 years!
A 2.8% hike in monthly benefits is on tap thanks to strengthening economic fundamentals and healthy inflation.
That hike — the largest since 2012 — will begin with benefits payable to Social Security beneficiaries in January 2019. Increased payments to SSI beneficiaries will start on December 31, 2018.
Read more about the big hike here.
2. High-income workers will pay more in Social Security taxes
Starting in 2019, high-income earners must pay Social Security taxes on the first $132,900 of income. That’s up $4,500 from the 2018 limit of paying taxes on the first $128,400 they earned.
Of course, that increase will look different in real life for you based on whether you’re a salaried worker or self-employed.
Salaried workers are on the hook for paying a 6.2% tax on that extra $4,500, which works out to be an extra $279. The self-employed, however, will pay double that amount for a grand total of $558.
3. Income thresholds for the retirement earnings test will go up
Good news for people who haven’t reached full retirement age, yet who are claiming their monthly Social Security check while still working.
In 2018, the SSA would withhold $1 of benefits based on your earned income for every $2 in earned income above $17,040 if you were in this situation.
But in 2019, that threshold is going up to $17,640.
If, however, you expect to reach your full retirement age in 2019, you’re working currently and you’re already claiming Social Security benefits, then you’re allowed to earn up to $46,920 this year.
Earn anything over that and the government will withhold $1 for every $3 above the limit.
But don’t worry, you get the money back once you hit your full retirement age under either of these two scenarios!
4. Disabled people will see more money
The roughly 10 million people who are unable to work and qualify for monthly disability payments from the SSA will be getting more money in 2019.
Those folks will see an increase of $40 over 2018 levels — up to $1,220/month — if they are considered non-blind. That’s the amount they can earn without hurting their qualification for needs-based benefits.
For those who are blind, they will receive $70 more over the prior 2018 rates. That means they can earn $2,040/month — up from last year’s monthly limit of $1,970 — without compromising their other benefits.
5. Qualifying for Social Security will be harder
In 2018, you earned one lifetime work credit for every $1,320 in earned income.
By 2019, you’ll need $1,360 in earned income for one credit.
(Editor’s note: The Social Security system is set up so that you must be a U.S. citizen who has earned 40 lifetime work credits to qualify.)
6. After 2034, you’ll only get roughly 75 cents on the dollar in benefits
We all know about the problems Social Security is facing.
With our aging population, we’re in a situation where we’re going from 2.8 active workers for every one Social Security beneficiary right now to 2.2 workers for each beneficiary by 2035, according to the SSA.
So how do you keep the promise of Social Security with that new math? The reality is you can’t.
According to recent projections, the SSA’s Office of the Chief Actuary estimates the program’s trust fund will be depleted between 2033 and 2034. But that doesn’t mean a big, fat goose egg for you years down the road.
The SSA estimates that incoming revenue from interest on trust fund balances and the income taxes that select Social Security recipients pay on their benefits will allow payouts of roughly three-quarters on all benefits that retirees expect.
So if you’re retiring 18 or more years from now, you can expect to get somewhere in the neighborhood of 75 cents on every dollar you contribute today. Not great news, but not the worst either.
7. You can use calculators to help you figure out the optimal time to claim
There are a variety of online calculators that will help you figure out the best time to claim your Social Security benefits.
Both the Consumer Financial Protection Bureau’s Planning for Retirement tool and AARP’s calculator let you pop info in and then they give you a decision tree to walk you through the process of figuring out when to claim.
They’re both completely free. You can see our in-depth walk-through of the AARP calculator here.
If you want to pay a little bit of money for a more detailed analysis, try MaximizeMySocialSecurity.com for an annual household license fee of $40.
8. The SSA’s name is being used in a popular scam
People continue receiving emails that pretend to be from the SSA with the subject line “Get Protected,” according to the Federal Trade Commission.
The gist of the email is that the government is offering to protect your personal info and prevent people from stealing your identity.
The text in the body of the email may mention the Safe Act of 2015, which gives it an air of legitimacy. There is also a link you can click on to get the supposed protection being offered by the SSA.
But you know the drill by now: If you click on that link that supposedly takes you to the SSA site, a keylogger virus is downloaded on your computer that allows crooks to gather your personal info as you type.
9. Medical offices are the #1 place where your Social Security number can be stolen
The Identity Theft Resource Center reports almost half of all identity theft now is happening in the medical field at hospitals, health insurers, medical offices and a variety of medical businesses like distributors of diabetes or dialysis supplies, medical billing services, pharmaceutical companies and so on.
There are many reasons why medical identity theft is running rampant. High turnover in the back offices and too much paperwork floating around are chief among them.
The scary reality is that one errant employee can steal the identities of hundreds if not thousands of people. Without question, this is the fastest growing area of identity theft.
So what can you do? Is this just another problem without a solution? No way.
Money expert Clark Howard has long told people not to fill out their Social Security number on any medical paperwork when you first go to a doctor. The only reason they want your Social Security is that so if you don’t pay, it’s easier to turn you over to a collection agency.
10. But you should also guard your SS number at these places, too…
Antivirus software company McAfee says there are other often-overlooked hot spots for criminal activity where you shouldn’t divulge the digits.
These places include colleges and universities, banking and financial institutions, state governments, local governments, the federal government, non-profits and technology companies.
This list was compiled based on frequency of data breaches that involved Social Security numbers.
11. Your new Medicare card won’t have your Social Security number on it
For those of you on Medicare, there’s a new law in place that will phase in new cards that don’t have your Social Security number on them.
New cards should have been mailed in all states by November 2018.
While this is a great step, the best way to shut down the ability of crooks to steal your identity is to do a credit freeze.
12. Helpful reminder: Don’t share your Social Security number on Facebook
Some 7% of people admitted to posting their Social Security number on social media, according to a report out of Visa’s 2013 Global Security Summit!
“Sharing such sensitive information on a social network… demonstrates a misunderstanding of how easily information can be consumed on social media platforms,” the Visa report noted.
Why would anyone do this?!