Taxable Earnings Have Risen to $132,900
One huge difference in social security for 2019 has been taxable earnings. This difference, all not seemingly much, could be detrimental to those who are not prepared for a tax increase.
2018 employees were first required to pay a 6.2% Social Security tax, including their employer matching their payment, on income up to $128,400. Any earnings above that amount were not subject to the tax. For example, if a recipient received 130,000 in benefits in 2018 then $1,600 of that money was considered tax free. In 2019 this has changed. The tax rate has not changed, still sitting at 6.2%. The cap has been lifted $132,900, increasing the taxable amount by $4,500. To many, this can be a major thorn in their side.
The maximum amount of earnings used by the SSA to calculate retirement benefits increases as the taxable maximum income increases.
The maximum monthly Social Security benefit for a worker retiring at full retirement age was $2,788 in 2018. In 2019, the maximum benefit increased $73 per month. This has brought the maximum benefit amount to $2,861.