If you are already receiving Social Security benefits, you will see a cost-of-living adjustment, or COLA raise, beginning in January 2019. Some additional changes are being made that will affect how much you will receive next year. For those still paying into Social Security, other changes to the program will have an impact on the amount you fork over to the federal government.
COLA of 2.8 Percent
Both Social Security and Supplemental Security Income (SSI) benefits will increase 2.8 percent in 2019. SSI beneficiaries will get their first raise December 31, 2018 and Social Security recipients will receive theirs in January. The COLA is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), as determined by the U.S. Bureau of Labor Statistics.
In practical terms, when Social Security grants a COLA, the size of your check goes up. For 2019 the average monthly Social Security benefit will increase $39 to $1,461. The maximum benefit for a worker at full retirement age will be $2,861 in 2019. It was $2,788 in 2018.
While a 2.8 percent COLA in 2019 is welcome—it’s the highest jump in seven years—the overall history of benefit increases has not kept pace with inflation. In fact, in 33 of the previous 35 years through 2016, the cost of medical care alone has outpaced Social Security benefit increases. The COLA was 0 percent in 2009, 2010 and 2015. In 2016 it was just 0.3 percent.
Medicare Part B Increases
If you are enrolled in Medicare and protected by the “hold harmless” clause freezing your Part B premium when there is no COLA, you will see a jump in 2019 just as you did in 2018 after Social Security granted a 2.0 percent COLA in 2017. If you have been paying the full cost of $134 per month, your premium will be going up by a small amount—$1.50—to $135.50.
Your annual income above a certain amount causes a Medicare Part B surcharge to kick in. The thresholds are the same as they were for 2018, but there is a new income category for high earners—those making $500,000 or more. For individual income above $85,000 and up to $107,000 the cost will be $189.60; for income above $107,000 and up to $133,500, it will be $270.90; for income above $133,500 and up to $160,000, it will be $352.20; for income above $160,000 and up to $500,000, it will be $433.40; and for anyone making $500,000 or more, the surcharge will be $460.50. (Limits for couples filing jointly are going up as well; check here for updates.)
The Medicare Part B deductible is also increasing in 2019 to $185 (from $183).
Higher Taxes and Earning Limits
If you are working, you contribute 6.2 percent of your earnings to Social Security. In 2019, you will contribute this amount until your income exceeds $132,900. Previously, the income limit was $128,400. Anything you earn over the new limit will not be taxed by Social Security and will not be used to calculate your retirement benefits.
For those younger than full retirement age but collecting Social Security benefits, the amount you can earn before having benefits withheld is going up. The new earnings limit will be $17,640. If you earn more than that, Social Security will withhold $1 for every $2 above the limit. The limit is $46,920 for the year in which you reach full retirement, with $1 withheld for every $3 you earn over the limit. Once you reach full retirement, your withheld benefits are gradually returned to you.
Older Full Retirement Age
If you turn 62 in 2018, your full retirement age will be 66 years and six months. Full retirement age will continue to increase in two-month increments annually until it reaches 67. You can still sign up for Social Security as early as age 62. As the gap between full retirement age and age 70 decreases, your ability to grow your benefit by waiting to start taking it will also decrease.
Online Statements and Security
Social Security stopped sending paper statements to everyone under the age of 60 in 2017. To get your earnings history or a personalized estimate of your benefits, create an online My Social Security account.
Each time you log in you will need to enter a one-time security code sent to your smartphone or email address. Known as “two-factor authentication,” this requirement is in addition to your username and password. New Medicare cards without Social Security numbers are being mailed out now. A fact sheet containing information about 2019 changes to Social Security is available here.