The 1999 “Numbers”

The federal benefit increase for 1999 is 1.3%, the lowest increase since 1987. The Title II change is effective with December 1998 [for benefits payable in January 1999], raising the average retirement benefit by $10 per month [to $780]. The maximum benefit for a worker retiring in January 1999 is $1,373 per month.

The federal SSI (Title XVI) increase for disabled individuals, first payable in January 1999, is from $494 to $500. The couple increase is from $741 to $751.

The amount of earnings required for a Title II quarter of coverage in 1999 is $740, up from $700 in 1998. The annual exempt amount under the retirement test is $9600 for beneficiaries under age 65. By statute, the annual exempt amount is $15,500 for retirees age 65 through 69. [P.L. 104-121; 3/29/96] Any annual excess is first charged against benefits for the worker and all entitled auxiliaries in January. As needed, subsequent monthly benefits are reduced to zero, month by month, until the excess is fully offset. The retirement test ends at age 70.

A monthly exempt amount is used in the retirement “grace year,” to allow full monthly benefits after a worker retires during the year. The monthly rates are simply 1/12 of the annual figure: $800 [beneficiaries under 65] and $1292 [beneficiaries 65 through 69].

After the exempt amount is passed, $1 of benefits is lost for $2 of earnings if the retired worker is under 65; $1 of benefits for $3 of earnings from ages 65 through 69.

The Medicare Part B (SMIB) premium in 1999 is $45.50 per month, a 3.9% increase from $43.80 in 1998.

The maximum amount of earnings subject to both Social Security and Medicare taxes in 1999 is $72,600. For the employed, the worker pays a Social Security tax of 6.2% [plus 1.45% for Medicare] and the employer pays 6.2% [plus 1.45% for Medicare]. Note: the self-employed pay both shares: 12.4%, plus 2.9% for Medicare. After earnings pass the $72,600 taxable maximum, the Social Security tax ends, but the Medicare tax continues – with no earnings limit.

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