Fast Facts About Social Security

2012

Cost-of-Living Adjustment (COLA) for 2012: 3.6 percent¹

Number of People Paying Into Social Security: 158 million

Percentage of American Workers Covered by Social Security: 94%

Number of People Receiving Social Security:

• Total OASDI Beneficiaries: 55.4 million

• Retirees and their families: 38.5 million

• Survivors of deceased workers: 6.3 million

• Disabled workers and their families: 10.6 million

Estimated Average Monthly Benefit

• Retired worker: $1,229

• Retired couple: $1,994

• Disabled worker: $1,111

• Disabled worker, Spouse and One or More Children: $1,885

• Aged widow or widower: $1,184

• Widow mother with two children: $2,505

Maximum Social Security Benefit: $2,513/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 Rate²

• Tax rate paid by employee: 5.65% (4.2% - OASDI, 1.45% - HI)

• Tax rate paid by employer: 7.65% (6.2% - OASDI, 1.45% - HI)

• Total tax rate paid by self-employed: 13.3% (10.4% - 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: $110,100

• HI: No Limit

Federal Income Taxes on Benefits

Single:

• 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

Married:

• 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:

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.  If there is no increase, as was the case this year, there is no COLA.

² Section 101 of the Temporary Payroll Tax Cut Continuation Act of 2011 reduced the OASDI payroll tax by 2 percentage points (from 6.20% to 4.20%) for the first two months of 2012. This reduction applies to the portion of the tax paid by the worker and self-employed individual. After February 2012, the payroll tax will return to the following rates unless changed by Congress: Employee 7.65% (6.20% - OASDI, 1.45% - HI), Self-Employed 15.30% (12.40% - OASDI, 2.90% - HI).