Cost-of-Living Adjustment (COLA1 ) for 2016: There was no COLA in 2016 because the rate of inflation as measured by the index was below the level set by the index in the previous year.
Number of Workers with Earnings Covered by Social Security: 167.6 million
Percentage of American Workers Covered by Social Security: 94%
Number of People Receiving Social Security:
- Total OASDI Beneficiaries: 59.9 million
- Retirees and their families: 42.9 million
- Survivors of deceased workers: 6.1 million
- Disabled workers and their families: 10.8 million
Estimated Average Monthly Benefit
- Retired worker: $1,340
- Retired couple: $2,210
- Disabled worker: $1,166
- Disabled worker, Spouse and One or More Children: $1,984
- Aged widow or widower: $1,285
- Widow mother with two children: $2,647
Maximum Social Security Benefit: $2,639/mo.
(Worker Retiring at Full Retirement Age)
Retirement Earnings Test Exempt Amounts:
Under full retirement age
NOTE: One dollar in benefits will be withheld for every $2 in earnings above the limit.
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.
Social Security and Medicare Tax Rate
- Tax rate paid by employee: 7.65% (6.2% - OASDI, 1.45% - HI)
- Tax rate paid by employer: 7.65% (6.2% - OASDI, 1.45% - HI)
- Total tax rate paid by self-employed: 15.3% (12.4% - OASDI, 2.9% - HI)
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 Taxable Earnings Base
- OASDI: $118,500
- HI: No Limit
Federal Income Taxes on Benefits
- Under $25,000 income- tax free
- Between $25,000-$34,000 - 50% added to Adjusted Gross Income (AGI)
- Over $34,000 - 85% added to AGI
- Under $32,000 income - tax free
- $32,000 to $44,000 - 50% added to AGI
- Over $44,000 - 85% added to AGI
(Note: Effective tax rate depends on seniors' overall tax bracket)
Full Retirement Age Schedule -- by Year of Birth:
1938 - 65/2 mos.
1942 - 65/10mos.
1957 - 66/6mos.
1939 - 65/4 mos.
1943-54 - 66
1958 - 66/8mos.
1940 - 65/6 mos.
1955 - 66/2mos.
1959 - 66/10mos.
1941 - 65/8 mos.
1956 - 66/4mos.
1960+ - 67
1A COLA is an automatic adjustment in benefits that occurs annually. The purpose of the COLA is to ensure that the purchasing power of Social Security and Supplemental Security Income (SSI) benefits is not eroded by inflation. It is based on the percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the third quarter of one year to the third quarter of the next.