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Cost-of-Living Adjustments
COLA Home This is an archival or historical document and may not reflect current policies or procedures.
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2006 SOCIAL SECURITY CHANGES

(October 2005)
Cost-of-Living Adjustment (COLA):
Based on the increase in the Consumer Price Index (CPI-W) from the third quarter of 2004 through the third quarter of 2005, Social Security and Supplemental Security Income (SSI) beneficiaries will receive a 4.1 percent COLA for 2006. Other important 2006 Social Security information is as follows:
Tax Rate
2005
2006
Employee
 7.65%
 7.65%
Self-Employed
15.30%
15.30%
NOTE: The 7.65% tax rate is the combined rate for Social Security and Medicare. The Social Security portion (OASDI) is 6.20% on earnings up to the applicable taxable maximum amount (see below). The Medicare portion (HI) is 1.45% on all earnings.

Maximum Earnings Taxable:
2005
2006
Social Security (OASDI only)
$90,000
$94,200
Medicare (HI only)
No Limit

Quarter of Coverage:
2005
2006
Earnings required
$ 920
$ 970

Retirement Earnings Test Exempt Amounts:
2005
2006
Under full retirement age
NOTE: One dollar in benefits will be withheld for every $2 in earnings above the limit.
$12,000/yr.
($1,000/mo.)
$12,480/yr.
($1,000/mo.)
The year an individual reaches full retirement age
NOTE: Applies only to earnings for months prior to attaining full retirement age. One dollar in benefits will be withheld for every $3 in earnings above the limit.
$31,800/yr.
($2,650/mo.)
$33,240/yr.
($2,770/mo.)
There is no limit on earnings beginning the month an individual attains full retirement age (65 and 6 months for retirees born in 1940; 65 and 8 months for those born in 1941).

Social Security Disability Thresholds:
2005
2006
Substantial Gainful Activity (SGA)
Non-Blind
$  830/mo.
$  860/mo.
Blind
$1,380/mo.
$1,450/mo.
Trial Work Period (TWP)
$  590/mo.
$  620/mo.

Maximum Social Security Benefit:
Worker Retiring at Full Retirement Age in
2005
2006
NOTE: For retirees born in 1940, full retirement age is 65 and 6 months; for those born in 1941, it is 65 and 8 months. Full retirement age will gradually increase to age 67 for those born in 1960 and later.
$1,939/mo.
(Age 65 and 6 months)
$2,053/mo.
(Age 65 and 8 months)

SSI Federal Payment Standard:
2005
2006
Individual
$ 579/mo.
$ 603/mo.
Couple
$ 869/mo.
$ 904/mo.

SSI Resources Limits:
2005
2006
Individual
$2,000
$2,000
Couple
$3,000
$3,000

SSI Student Exclusion Limits:
2005
2006
Monthly Limit
$1,410
$1,460
Annual Limit
$5,670
$5,910

Estimated Average Monthly Social Security Benefits Payable in January 2006:
Before
4.1% COLA
After
4.1% COLA
All Retired Workers
$  963
$1,002
Aged Couple, Both Receiving Benefits
$1,583
$1,648
Widowed Mother and Two Children
$1,992
$2,074
Aged Widow(er) Alone
$  929
$  967
Disabled Worker, Spouse and One or More Children
$1,509
$1,571
All Disabled Workers
$  902
$  939
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