The increase will affect monthly Social Security and Supplemental Security Income (SSI) benefits for nearly 63 million Americans. The 1.5% cost-of-living adjustment (COLA) will begin with benefits that more than 57 million Social Security beneficiaries receive in January 2014. Increased payments to more than 8 million SSI beneficiaries will begin on December 31, 2013.
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 from $113,700 to $117,000. 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, according to the SSA.
More information about how the COLA is calculated can be found here.
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