Social Security to release 2014 COLA data next week

Government shutdown delayed annual announcement

Oct 24, 2013 @ 9:26 am

By Mary Beth Franklin

+ Zoom

Next week, the Bureau of Labor Statistics will issue the September Consumer Price Index report, the final piece of data that the Social Security Administration needs to plug into its annual cost of living adjustment formula.

Social Security benefits — and the taxable wage base for workers — will be slightly higher next year as a result of the COLA.

The CPI was one of several key economic reports that were delayed due to the 16-day government shutdown. It is now scheduled to be released next Wednesday.

"We usually send out our COLA press release shortly after the CPI is announced by BLS in the morning," Social Security spokeswoman Kia Anderson wrote in an e-mail.

The 7.65% tax rate is the combined rate for Social Security and Medicare.

The Social Security portion, the OASDI, is 6.2% on earnings up to the applicable taxable maximum amount. The Medicare portion (HI) is 1.45% on all earnings, even those above the taxable OASDI limit.

Portions of the Social Security and Medicare taxes are paid by employers and employees for a combined payroll tax rate of 15.3%. Self-employed individuals pay both portions of the tax.

Starting this year, very high earners are subject to an additional Medicare payroll tax of 0.9% on earnings above $200,000 for single workers and $250,000 for married workers filing jointly. An employer is required to begin withholding the additional tax in the pay period when an employee's wages exceed $200,000.

The new Medicare tax, created by the Affordable Care Act to help finance expanded health care coverage, applies only to employees, not employers.

0
Comments

What do you think?

View comments

Recommended for you

Sponsored financial news

Featured video

Events

The client of the future

Your clients of tomorrow want you to stay ahead of the curve with technology. Some of the industry’s top young advisers and thought leaders explain what they think tomorrow’s clients will need.

Latest news & opinion

Odds are, the $700M Powerball winner will need lots of advice

A good financial adviser — or, better yet, a team of them — would provide a sense of perspective and calm that would hopefully prevent this winner from following in the footsteps of so many past winners who wound up broke in just a few years.

Emerging issues affecting financial advice

The profession will need to adjust to enormous shifts in the socioeconomic environment in the coming decade.

Cetera broker-dealers to pay back $3.3 million to clients overcharged for mutual funds

Over an eight-year period, the B-Ds failed to properly supervise sales charge waivers to clients in retirement plans and charitable organizations.

Fiduciary advocates press CFP Board for specifics on standards changes

Meanwhile, few brokerages and their trade associations, which blasted the DOL's fiduciary rule in comment letters, are responding to the CFP Board's proposal.

Big gains attract new money to emerging markets, but should investors stay?

An estimated $6.7 billion has flowed into emerging-market stock funds and ETFs so far this year, according to Morningstar.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print