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According to the Social Security Administration, Social Security benefits will rise by just 1.7% in 2013. This is less than half of the 3.6% cost of living adjustment in 2012, though infinitely higher than the 0% increase in 2010 and 2011.
For those of you that are still working, this means that the Social Security ceiling is also increasing. The ceiling currently stands at $110, 100 and will rise to $113, 700 in 2013.
In other words… The first $113, 700 that you earn will be subject to Social Security taxes (FICA-OASDI). After that, you will pay only the medicare portion (FICA-HI).
And, of course, the Social Security payroll tax is expected to increase further (from 4.2% to 6.2% on the employee portion) due to the impending lapse of the so-called “payroll tax holiday“.
What do you think about these increases? Too much? Not enough?