Social Security

Monthly Social Security and Supplemental Security Income benefits for more than 51 million Americans will increase 2.1 percent in 2004, the Social Security Administration announced today.

Social Security and Supplemental Security Income benefits increase automatically each year based on the rise in the Bureau of Labor Statistics? Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), from the third quarter of the prior year to the corresponding period of the current year. This year's increase in the CPI-W was 2.1 percent.

The 2.1 percent Cost-of-Living Adjustment (COLA) will begin with benefits that 47 million Social Security beneficiaries receive in January 2004. Increased payments to 7 million Supplemental Security Income beneficiaries will begin on December 31.

Some other changes that take effect in January of each year are based on the increase in average wages. Based on that increase, the maximum amount of earnings subject to the Social Security tax (taxable maximum) will increase to $87,900 from $87,000 in 2003. Of the estimated 156 million workers who will pay Social Security taxes in 2004, about 9.2 million will pay higher taxes as a result of the increase in the taxable maximum in 2004.

Cost-of-Living Adjustment (COLA):

Based on the increase in the Consumer Price Index (CPI-W) from the third quarter of 2002 through the third quarter of 2003, Social Security and Supplemental Security Income (SSI) beneficiaries will receive a 2.1 percent COLA for 2004. Other important 2004 Social Security information is as follows:

Tax Rate	2003	2004
Employee	7.65%	7.65%
Self-Employed	15.30%	15.30%
NOTE: The 7.65% tax rate is the combined rate for Social Security and Medicare. The Social Security portion (OASDI) is 6.20% on earnings up to the applicable taxable maximum amount (see below). The Medicare portion (HI) is 1.45% on all earnings.

Maximum Earnings Taxable:	2003	2004
Social Security (OASDI only)	$87,000	$87,900
Medicare (HI only)	No Limit

Quarter of Coverage:	2003	2004
Earnings required	$890	$900

Retirement Earnings Test Exempt Amounts:	2003	2004
Under full retirement age NOTE: One dollar in benefits will be withheld for every $2 in earnings above the limit.	$11,520/yr. ($960/mo.)	$11,640/yr.. ($970/mo.)
The year an individual reaches full retirement age NOTE: Applies only to earnings for months prior to attaining full retirement age. One dollar in benefits will be withheld for every $3 in earnings above the limit.	$30,720/yr. ($2,560/mo.)	$31,080/yr. ($2,590/mo.)
There is no limit on earnings beginning the month an individual attains full retirement age (65 and 2 months for retirees born in 1938; 65 and 4 months for those born in 1939).

Social Security Disability Thresholds:		2003	2004
Substantial Gainful Activity (SGA)	Non-Blind	$ 800/mo.	$ 810/mo.
Substantial Gainful Activity (SGA)	Blind	$1,330/mo.	$1,350/mo.
Trial Work Period (TWP)		$ 570/mo.	$ 580/mo.

Maximum Social Security Benefit: Worker Retiring at Full Retirement Age in	2003	2004
NOTE: For retirees born in 1938, full retirement age is 65 and 2 months; for those born in 1939, it is 65 and 4 months. Full retirement age will gradually increase to age 67 for those born in 1960 or later.	$1,741/mo. (Age 65 and 2 months)	$1,825/mo. (Age 65 and 4 months)

SSI Federal Payment Standard:	2003	2004
Individual	$ 552/mo.	$ 564/mo.
Couple	$ 829/mo	$ 846/mo.

SSI Resources Limits:	2003	2004
Individual	$2,000	$2,000
Couple	$3,000	$3,000

SSI Student Exclusion Limits:	2003	2004
Monthly Limit	$1,340	$1,370
Annual Limit	$5,410	$5,520

Estimated Average Monthly Social Security Benefits Payable in January 2004:	Before 2.1% COLA	After 2.1% COLA
All Retired Workers	$ 903	$ 922
Aged Couple, Both Receiving Benefits	$1,492	$1,523
Widowed Mother and Two Children	$1,865	$1,904
Aged Widow(er) Alone	$ 870	$ 888
Disabled Worker, Spouse and One or More Children	$1,412	$1,442
All Disabled Workers	$ 844	$ 862

Social Security Announces 2.1 Percent Benefit Increase for 2004