With the social security increase of 1.4% the average retiree will see a boost of $13 a month to a monthly total of $695, representing the smallest increase in social security since 1999, when the improvement was 1.3%.
Based on that increase, the maximum amount of earnings subject to the Social Security tax (taxable maximum) will increase to $87,000 from $84,900 in 2002, according to the Social Security Administration. As a result of the increase in the taxable maximum in 2003, the maximum yearly Social Security tax paid by employees and employers will increase by $130.20 each for a total of $5394.00. For self-employed workers, it will rise by $260.40 to a total of $10,788.00.
Of the approximately 155 million workers who pay Social Security taxes, about 9.7 million are affected by the higher wage base in 2003.
In addition, the Labor Department noted that health care costs continued to escalate, rising 0.3% in September after a 0.2% increase in August. Health care costs have outpaced other expenditures in recent months.
Despite rising energy costs, up 0.7% in September, the overall CPI rose a modest 0.2% in September. The consensus among analysts is that the jump in energy costs will not cause a large acceleration in overall inflation.