2017 thru 2021 Wage Bases and Earnings Limits; Social Security & Medicare Benefit Info
2017 Cost-of-Living (COLA adjustment: .3%
2017 Wage Base-Social Security Tax (6.2%): $127,200
2017 Wage Base-Medicare Tax (1.45%): NO LIMIT
Social Security Earning Limit (before benefit reductions)
--2017 Below Full Retirement Age (FRA): 16,920 <--(benefits reduced by $1 for each $2 earned over limit)
--2017 Year FRA Reached, benefits reduced for $1 for each $3 earned over (months up to FRA only) LIMIT = $44,880
2018 Cost-of-Living (COLA adjustment): 2%
2018 Wage Base-Social Security Tax (6.2%): $128,400
2018 Wage Base-Medicare Tax (1.45%): NO LIMIT
Social Security Earning Limit (before benefit reductions)
--2018 Below Full Retirement Age (FRA): $17,040 ($1420/mo)
--2018 Year FRA Reached, benefits reduced $1 for each $3 earned over (months up to FRA only) LIMIT = $45,360 ($3780/mo)
2019 Cost-of-Living (COLA adjustment): 2.80%
--2019 Wage Base-Social Security Tax (6.2%): $132,900
--2019 Wage Base-Medicare Tax (1.45%): NO LIMIT
--Social Security Earning Limit (before benefit reductions)
--2019 Below Full Retirement Age (FRA): $17,640
--2019 Year FRA Reached, benefits reduced $1 for each $3 earned over (months up to FRA only) LIMIT = $46,920
2020 Cost-of-Living (COLA adjustment):
--2020 Wage Base-Social Security Tax (6.2%): $137,700
--2020 Wage Base-Medicare Tax (1.45%): NO LIMIT
--2020 Social Security Earning Limit (before benefit reductions):
- Under Retirement Age $18,240
- Year of Retirement Age $48,600
2021 Cost-of-Living (COLA adjustment):
--2021 Wage Base-Social Security Tax (6.2%): $142,800
--2021 Wage Base-Medicare Tax (1.45%): NO LIMIT
--2021 Social Security Earning Limit (before benefit reductions):
- Under Retirement Age $18,960
- Year of Retirement Age $50,520
Estimating Social Security Benefits:
An estimate of Social Security benefits is available at www.ssa.gov/estimator. There are calculators that estimate potential benefit amounts using assumptions about retirement dates and different levels of future earnings. The calculators show reitrement benefits as well as disability and survivor benefit amounts.
Social Security Credits:
A person becomes insured (eligible for Social Security benefits) by acquiring a certain number of credits. Wage earners and self-employed taxpayers earn one credit for each $1,410 of earnings in 2020, up to a maximum of four credits per year. For example, if a worker earns $5,640 in the first two months of 2020, he receives four credits (4 x $1,410) for 2020.
Employees acquire credits by working in employment covered by Social Security for years after 1936. Self-employed taxpayers acquire credits of coverage by paying SE tax in years after 1950 (certain trades have a first year of coverage later than 1950). If employment ends before enough credits are earned, no benefits are payable. If employment resumes in later years, past credits earned are combined with current credits earned in determining eligibility for benefits.
In most cases, a worker needs 40 credits (10 years of work) to be eligible for Social Security retirement benefits. Exceptions apply for workers who become disabled or die.
NOTE: Credits are only used to determine eligibility for coverage and have no effect on the amount of benefits payable.
NOTE2: The maximum Social Security benefit for a worker who starts taking benefits at FRA is $3,148 per month (for 2021). The actual amount depends on a formula that considers the worker's lifetime earnings.
Months Benefits are Not Payable:
- The month of the person's death (for worker's benefits only; survivors' benefits begin in the month of the worker's death).
- The month in which a person reaches age 62 (unless the birthday is on the first or second day of the month). An individual receiving benefits at full retirement age receives the first check for the first month he meets all of the eligibility requirements.
- Months during which an individual serves jail time related to a crime punishable by imprisonment of at least one month for which he is convicted. For most Social Security programs, the full month's benefits are not payable even when an individual served only a day of that month in jail surrounding a criminal conviction.
Applying for Medicare Benefits:
Medicare is a national health insurance program for:
- Persons age 65 or older
- Certain disabled persons
- Person of any age with permanent kidney failure or Lou Gehrig's disease
Medicare is FOUR programs: [Note: Medicare does not cover most dental care, dentures, routine foot care and hearing aids. Eyeglasses are only coverd if corrective lenses are needed after a cataract operation (other exclusions apply).]
- Part A: Hospital Insurance. For most Medicare beneficiaries, there is no premium for Medicare Part A. Individuals who are ineligible for free Part A can still enroll, but must pay a premium. Non-covered benefits result from not having enough employment credits.
- Part B: Medical Insurance
- Part C: Combined Part A & Part B. Private insurance companies approved by Medicare provide this combined coverage through Medicare advantage plans like HMOs and PPOs.
- Part D; Prescription drug coverage. Optional coverage.
Anyone not receiving Social Security retirement, disability or railroad retirement benefits should contact Social Security three months before turning age 65.
- Automated Telephone Services: 800-772-1213
- Your local Social Security Office: 7 AM to 7 PM (M-F)
Individuals who must contact Social Security for Medicare:
- Disabled widow(er) age 50 to 65 who has not applied for disability benefits because he is getting another kind of Social Security benefit
- Government employee disabled before age 65
- Individual, or his spouse or dependent child, with permanent kidney failure
- Individual who had Medicare Part B in the past, but dropped coverage
- Individual who turned down Medicare Part B when he became entitled for Medicare Part A
CAUTION: The sign-up period for Medicare Part B lasts seven months. It begins three months before the 65th birthday, includes the birthday month, and ends three months after the month that includes the 65th birthday. If not enrolled during initial enrollment, another opportunity is given each year from January 1 through March 31, with coverage beginning the following July. Anyone not enrolling in Medicare Part B when eligible pays a penalty to enroll later. The penalty is a premium increase of 10% for each year eligible and not enrolled.
Earnings Record -- Check Every Three Years
The statute of limitations for correcting a Social Security earnings record is three years, three months and 15 days after the year in which the wages were paid or the SE income was earned. In some situations, the earnings records can be corrected after this time limit, for example, to correct a fraudulent entry, a mechanical, clerical or other error in crediting earnings to the correct person or period.