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2002 SOCIAL SECURITY CHANGES
(Aquí en Español)

Cost-of-Living Adjustment (COLA):
Based on the increase in the Consumer Price Index (CPI-W) from the third quarter of 2000 through the third quarter of 2001, Social Security beneficiaries and Supplemental Security Income (SSI) recipients will receive a 2.6 percent COLA for 2002. Other important 2002 Social Security information is as follows:

Tax Rate
2001
2002
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:
2001
2002
Social Security (OASDI only)
$80,400
$84,900
Medicare (HI only)
No Limit

Quarter of Coverage:
2001
2002
Earnings required
$830
$870

Retirement Earnings Test Exempt Amounts:
As of January 2000, the Retirement Earnings Test has been eliminated for individuals age 65-69. It remains in effect for those ages 62 through 64. A modified test applies for the year an individual reaches age 65. (The Senior Citizens’ Freedom To Work Act of 2000, signed into law by President Clinton on April 7, 2000.)
 
2001
2002
Year individual reaches 65

$25,000/yr.
($2,084/mo.)
$30,000/yr.
($2,500/mo.)
NOTE: Applies only to earnings for months prior to attaining age 65. One dollar in benefits will be withheld for every $3 in earnings above the limit. There is no limit on earnings beginning the month an individual attains age 65.
Under age 65

$10,680/yr.
($890/mo.)
$11,280/yr.
($940/mo.)
NOTE: One dollar in benefits will be withheld for every $2 in earnings above the limit.

Social Security Disability Thresholds
2001
2002
Substantial Gainful Activity (SGA)
  Non-Blind
$740/mo.
$780/mo.
  Blind
$1,240/mo.
$1,300/mo.
Trial Work Period (TWP)
$530/mo.
$560/mo.

Maximum Social Security Benefit:
Worker Retiring at Age 65 in January
2001
2002
$1,536/mo.
$1,660/mo.

SSI Federal Payment Standard:
2001
2002
Individual
$531/mo.
$545/mo.
Couple
$796/mo
$817/mo.

SSI Resources Limits:
2001
2002
Individual
$2,000
$2,000
Couple
$3,000
$3,000

SSI Student Exclusion Limits:
2001
2002
Monthly Limit
$1,290
$1,320
Annual Limit
$5,200
$5,340

Estimated Average Monthly
Social Security Benefits:
Before and After the December 2001 COLA:
 
Before
2.6% COLA
After
2.6% COLA
All Retired Workers
$ 852
$ 874
Aged Couple, Both Receiving Benefits
$1,418
$1,454
Widowed Mother and Two Children
$1,719
$1,764
Aged Widow(er) Alone
$ 820
$ 841
Disabled Worker, Spouse and
One or More Children
$1,325
$1,360
All Disabled Workers
$ 794
$ 815
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