The Social Security Administration has announced a 1.6% increase in Social Security and Supplemental Security Income (SSI) benefits for 2020, a significantly smaller cost-of-living increase (COLA) than the year before. Increased payments to Social Security recipients begin on January 1, 2020, while increased payments to SSI recipients begin on December 27, 2019. Other numbers regarding eligibility for disability and average benefits have also changed for 2020.
The new SSI federal base amount is $783 per month for an individual and $1,175 per month for a couple. The SSI payment amounts are higher in states that pay a supplementary SSI payment.
While exact Social Security retirement and disability benefit amounts depend on the lifetime earnings of the recipient, here are the average benefit amounts anticipated for 2020:
The maximum Social Security retirement benefit that can be collected at full retirement age is $3,011 per month in 2019, though few people are able to collect this amount.
Note that, for some Social Security recipients, the 1.6% increase may be partially offset by increases in Medicare Part B premiums, particularly for retirees with high income.
SSDI payments depend on your average earnings over the past 35 years. Social Security will average your earnings over these years to come up with your "average indexed monthly earnings" (AIME). The agency then takes certain percentages of your AIME (called bend points) to come up with your primary insurance amount. For details on the calculations, see our article on how much you'll get in SSDI.
An applicant for disability benefits through the Social Security disability insurance (SSDI) or SSI programs must be making less than $1,260 per month (up from $1,220 per month in 2019) to qualify for benefits. (Blind applicants can make up to $2,110 per month). Anyone working above those limits is considered to be doing "substantial gainful activity" (SGA).
However, people who are currently receiving SSDI and attempt to return to work can make more during a trial work program. A month counts as a trial work period month when an SSDI recipient makes more than $910 per month (up from $880 per month in 2019).
For people who are receiving SSI, the new federal income limit for SSI is $783 per month, but complicated rules govern what income is countable and what income is not. Over half of the income made by an SSI recipient is not counted toward the limit, so you can actually receive SSI until you make up to $1,650 per month (if you have no other income). However, any income received between $0 and $1,650 will reduce the monthly benefit. (For instance, if you earn $1,500 a month and have no other income, your SSI check will be only $75.50.) In some states that make extra payments to SSI recipients, the income limit for SSI recipients may be higher.
The income exclusion amount for students receiving SSI is now $1,900 per month (up to an annual limit of $7,670).
Those who collect early retirement benefits but continue to work have their benefits reduced when they make over $18,240 per year ($1,520 per month). But in the year a recipient reaches full retirement age, he or she can make up to $4,050 per month without having retirement benefits taken away. (After the worker reaches full retirement age, benefits aren't reduced at all, regardless of the amount of work or earnings.) Any early retirement benefits deducted while you were working are added back to your retirement check over the next 10-15 years.
The maximum amount of earnings that is subject to the Social Security tax is $137,700, up from $132,900 in 2019. There is no limit to the amount of income subject to the Medicare tax.
The Social Security figures and limits for 2019 can be found in the 2019 update.
Effective date: Jan 01, 2020