Social Security for 2014 Set

The announcement of the latest Consumer Price Index locks in the Social Security numbers for 2014. Retirement benefits will rise 1.5% (compared with a 1.7% increase for 2013), and taxes on salaries and self-employment income will rise by by 2.9%, with the top income subject to the tax being $117,000. Details are here.

While the 1.5% cost of living adjustment to Social Security benefits is a tiny bit smaller than 2013’s 1.7% COLA,  most retirees will actually come out a bit ahead.  That’s because they won’t see any increase in 2014 in the amount deducted from their  benefits checks for Medicare Part B premiums. In 2013 the basic premium went up by $5 to $104.90 per person a month for 2014. (The average gross monthly Social Security benefit in 2014, for retirees of all ages and earnings levels, will be $1,294 for a single and $2,111 for a couple, the Social Security Administration estimates.)

The additional Medicare Part B premiums charged to higher income seniors will also remain unchanged in 2014. Those premiums start at an extra $42 a month per person for singles with modified adjusted gross ranging from $85,000 to $129,000 and couples with MAGI from $170,000 to $258,0000. The extra premiums top out at $230.80 per person a month for singles with income above $214,000 and couples above $428,000.