Posted on January 12, 2005 at 17:18:25:
The good news is that Social Security benefits will rise 2.7 percent this year, even more than last year’s increase. The cost-of-living adjustment starts with the checks for this January.
The maximum earnings amount subject to the Social Security has gone up, too, to $90,000 from $87,900. The rate is 6.20 percent paid by the worker and the same amount paid by the employer. There is no maximum limit on wages subject to Medicare tax, 1.45 percent from both worker and employer. The self-employed must pay the entire Social Security and Medicare taxes themselves.
The bad news is that the Part B Medicare premiums taken out of Social Security benefits has gone up even more than the Social Security benefits, by 17.4 percent from $66.60 to $78.20. By law, though, the increase in an individual’s Medicare premium cannot be larger than the beneficiary’s COLA increase. If it is, a Medicare representative told us, Social Security will make an adjustment.