Based on the increase in the Consumer Price Index (CPI-W) from the third quarter of 2003 through the third quarter of 2004, Social Security and Supplemental Security Income (SSI) beneficiaries will receive a 2.7 percent COLA for 2005. Other important 2005 Social Security information is as follows:

Tax Rate

2004

2005

  Employee

7.65%

7.65%

  Self-Employe d

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:

2004

2005

  Social Security (OASDI only)

$87,900

$90,000

  Medicare (HI only)

No Limit

Quarter of Coverage:

2004

2005

  Earnings required

$900

$920

Retirement Earnings Test Exempt Amounts:

2004

2005

Under full retirement age
NOTE: One dollar in benefits will be withheld for every $2 in earnings above the limit.

$11,640/yr.
($97040/mo.)

$12,000/yr.
($1,000/mo.)

Year 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.

$31,080/yr.
($2,590/mo.)

$31,800/yr.
($2,650/mo.)

There is no limit on earnings beginning the month an individual attains full retirement age (65 and 4 months for retirees born in 1939; 65 and 6 months for those born in 1940).

SSI Federal Payment Standard:

2004

2005

  Individual

$564/mo.

$579/mo.

  Couple

$846/mo

$869/mo.

SSI Resources Limits:

2004

2005

  Individual

$2,000

$2,000

  Couple

$3,000

$3,000

SSI Student Exclusion Limits:

2004

2005

  Monthly Limit

$1,370

$1,410

  Annual Limit

$5,520

$5,670

Estimated Average Monthly Social Security Benefits Payable in January 2005:

Before
2.7% COLA

After
2.7% COLA

  All Retired Workers

$ 930

$955

  Aged Couple, Both Receiving Benefits

$1,532

$1,574

  Widowed Mother and Two Children

$1,927

$1,979

  Aged Widow(er) Alone

$ 896

$ 920

  Disabled Worker, Spouse and
  One or More Children

$1,458

$1,497

  All Disabled Workers

$ 871

$ 895