May people ring in the new year with champagne. People who receive Social Security or Supplemental Security Income (SSI) got to ring it in with a COLA. This year, more than 60 million Americans are receiving a 1.5 percent cost of living adjustment (COLA) in their monthly benefit payment.
The 1.5 percent COLA began with increased benefits for Social Security beneficiaries in January 2014, and payments to SSI recipients started in late December 2013.
The estimated average monthly Social Security payment to a retired worker is $1,294 (in 2014), up from $1,275 (in 2013). The average monthly SSI payment is $1,148 (in 2014), up from $1,131 (in 2013).
The basic monthly federal payment for SSI is $721 (in 2014), up from $710 (in 2013).
Some other changes that take effect in January of each year are based on the increase in average wages. For example, the maximum amount of earnings subject to the Social Security payroll tax (taxable maximum) will increase to $117,000, up from $113,700. Of the estimated 165 million workers who will pay Social Security taxes in 2014, about 10 million will pay higher taxes as a result of the increase in the taxable maximum.
The amount of earnings needed for one credit of Social Security coverage has gone up as well, but all workers can still earn up to four credits in a year. In 2014, a worker earns a credit after earning $1,200 ($1,160 in 2013). It takes 40 credits to be fully insured for retirement benefits.