Social Security And You
Beginning January 2008, a 2.3 percent cost-of-living adjustment (COLA) will be applied to all Social Security and SSI payments. As a result, the average monthly benefit for a retired worker in January 2008 will be $1,079 (up from $1,055) and the average monthly benefit for a disabled worker in January 2008 will be $1,004 (up from $981).
For people who receive SSI, the maximum federal payment mount will increase to $637 (up from $623). There are other Social Security changes in 2008 worth noting. For example, in 2008, a worker will pay Social Security tax on up to $102,000 of annual earnings (up from $97,500). The tax rates remain the same. Employees will continue to pay 6.2 percent on their wages, and the self-employed will continue to pay 12.4 percent on their net earnings. The Medicare tax rate will continue to be 1.45 percent (2.90 percent for those who are self-employed), and there is no limit on the amount of earnings subject to the Medicare tax.
Aworker will earn one credit of coverage after paying taxes on $1,050 in earnings (up from $1,000). As always, four credits may be earned each year and a person generally needs 40 credits to be eligible for retirement benefits.
To learn more about these changes that will take place in 2008 and to find other important Social Security information, visit the Social Security website at www.so cialsecurity.gov.