The
Social Security Administration has implemented a variety of new rules
and features for 2013. The two-year payroll tax cut has officially
ended, and paper Social Security checks will soon cease to be printed. A
growing number of Social Security services will also be online this
year. Here's a look at some of the recent Social Security changes that
go into effect this year:
[Read: 12 Ways to Increase Your Social Security Payments.]
Payroll tax cut ends. The temporary payroll tax cut was
allowed to expire at the end of 2012. Workers who paid 4.2 percent of
their income into the Social Security system in 2011 and 2012 will now
resume contributing 6.2 percent of their earnings in 2013, up to the
payroll tax cap of $113,700.
Higher payroll tax cap. The payroll tax cap increased
by $3,600, from $110,100 in 2012 to $113,700 in 2013. Workers who earn
more than this threshold don't need to pay Social Security taxes on that
income.
More online services. A trip to the Social Security
office is no longer necessary to start your Social Security payments. A
growing number of retirees are claiming Social Security payments online,
largely thanks to an advertising campaign starring actors Patty Duke
and George Takei. For the first time in 2012, workers could access their
Social Security statements online, including their complete earnings
history and expected payments, and about 3 million people have already
done so. In early 2013, Social Security added online services including
the ability to access a benefit verification letter and payment history.
Retirees can also change their address and start or change
direct-deposit information online. "The ability to do this online, it
will be a real convenience for the people who are required to have these
benefit verification letters," says Social Security Commissioner
Michael Astrue. "It is going to allow us to focus on the kind of
conversations that we really do need to have face to face."
[Read: Social Security Statements Now Available Online.]
Reduced office hours. Social Security offices are
reducing the hours they are open to the public to save money and avoid
paying overtime to workers. Social Security locations nationwide have
been closing 30 minutes early each day since Nov. 19, 2012, and they
began closing to the public at noon every Wednesday on Jan. 2, 2013.
Paper checks will end. On March 1, 2013, the Treasury
department will stop mailing paper checks to Social Security recipients.
Retirees will be required to choose to have their Social Security
payments either directly deposited into a bank or credit union account
or loaded onto a prepaid Direct Express Debit MasterCard. "If you
already have a bank account or credit union account, we encourage you
and it's our preference that you sign up for direct deposit," says Walt
Henderson, director of the electronic fund transfer strategy division at
the Treasury Department. "The debit card is primarily for unbanked
benefit recipients. We don't want people who already have a bank account
to feel that they have to get the debit card." New Social Security
beneficiaries have been required to choose an electronic payment option
since May 2011, and approximately 93 percent of Social Security and
Supplemental Security Income (SSI) payments are already being made
electronically.
Higher earnings limit. People between ages 62 and 66
who work and collect Social Security benefits at the same time might
have part or all of their Social Security benefit temporarily withheld.
Workers between ages 62 and 65 can earn up to $15,120 in 2013, after
which $1 in benefits will be withheld for every $2 of income above the
earnings limit. People who turn 66 this year can earn up to $40,080, and
then $1 of benefits will be withheld for every $3 earned above the
limit. However, once you turn age 66, the earnings limit no longer
applies. And benefits may be recalculated at age 66 to reflect the
withheld benefits and continued earnings.
[See: 10 Places to Retire on Social Security Alone]
Bigger payments. Social Security beneficiaries began
receiving payments that were 1.7 percent larger in January 2013. The
average monthly Social Security benefit in January increased from $1,240
to $1,261 as a result of the cost-of-living adjustment
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