The Social Security Administration has announced the 2019 Social Security benefit amounts and the maximum withholding change for the 2019 tax year. What that means for those turning 62 in 2020 is that their full retirement age will be 66 and eight months. However, the provisions didn't take effect immediately. Meanwhile, President Trump has hinted for years that he's interested in Social Security reforms, and the fact that he's looking to forgive four months' worth of payroll taxes is a sign that Social Security beneficiaries may not fare all that well if he's reelected. Democratic candidate Joe Biden wants to see more payroll taxes imposed on higher earners to generate additional revenue for Social Security. Right now, workers pay that tax on up to $137,700 of earnings, and that threshold changes annually. For those still a few years away from retirement, those born in … That's because lawmakers back then dealt with potential financial difficulties for the program by instituting new rules that effectively reduced how much those hitting early retirement age will get from Social Security. By law, some numbers change automatically each year to keep up with changes in price and wage levels. As the Fool's Director of Investment Planning, Dan oversees much of the personal-finance and investment-planning content published daily on Fool.com. As a result, you’ll pay no more than $8,537.40 ($137,700 x 6.2%) in Social Security taxes. Over time, though, the slight reductions will add up. At the same time, President Trump just signed an executive order calling for the deferment of payroll taxes from September through December of 2020. You'll get 40 months' worth of delayed retirement credits, which will boost your check by 26 2/3%. Either way, we can expect Social Security to be a hot-button issue as we slowly but surely inch closer to November. But how worried should the public really be? Many people spend years looking forward to turning 62. The change in full retirement age affects your benefits no matter when you claim. That's up two months from the full retirement age of 66 and six months for those who turned 62 in 2019. Instead, increases to the full retirement age got implemented on a delayed basis. Sometim… If you think you can avoid the problem by holding off longer before claiming your Social Security benefits, think again. Copyright, Trademark and Patent Information. Cumulative Growth of a $10,000 Investment in Stock Advisor, Social Security Cuts Are a Major Issue in the 2020 Election, Data Reveals @themotleyfool #stocks, 3 in 10 Retirees Say They Weren't Prepared for This Rule, Which Is Making a Comeback in 2021, Back on Track: Don't Be Among the 42% of Workers Worried They'll Never Retire, 4 Easy Ways to Lower Your Living Costs in Retirement, These Tax Moves Could Save You Serious Money -- but You'll Need to Make Them Soon. Those turning 62 in 2021 and 2022 will also have to deal with this Social Security cut, until the full retirement age finally maxes out at 67. Returns as of 11/29/2020. Meanwhile, 21% of married seniors and around 45% of unmarried seniors rely on Social Security for 90% of their income or more. Under laws that took effect more than 35 years ago, the benefits that you'll receive will be less than what people in a similar position in 2019 received. Before the COVID-19 pandemic, Social Security's Trustees estimated that the program's trust funds would be depleted by 2035. In 2020, this limit is $137,700. Since March, tens of millions of Americans have lost their jobs, and so Social Security has lost a large amount of payroll tax revenue. Because your full retirement age is 66 and eight months, retiring at 62 means that you're getting your benefits 56 months early. Full Retirement Age Has Increased. TNEA Cutoff 2020 for SSNCE The SSNCE final cutoff will be made available by the institute after the last round of TNEA Counselling. As an example, say that you're turning 62 in 2020 and were an above-average earner throughout your career, therefore qualifying for a full retirement monthly benefit of … In 2020, for instance, the Social Security Administration will deduct $1 from benefits for each $2 earned over $18,240. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. Market data powered by FactSet and Web Financial Group. Dan Caplinger has been a contract writer for the Motley Fool since 2006. The SSNCE cutoff will be released in the form of opening and closing ranks. However, for the person who turned 62 in 2019 instead of 2020, the increase would be slightly greater, with 42 months adding up to a 28% boost. 2020 Update 2020 This update provides information about Social Security taxes, benefits, and costs for 2020. Determining Factors for SSN College of Engineering Cut off: The Ascent is The Motley Fool's new personal finance brand devoted to helping you live a richer life. Social Security's primary revenue source is payroll taxes. The Ascent is The Motley Fool's new personal finance brand devoted to helping you live a richer life. When Americans line up to vote in the upcoming election, they'll be considering a number of key issues -- and Social Security's fate is one of them. The 2019 increase is larger than larger than in the past few years because the Cost of Living Increase for Social Security recipients increased, to 2.8 percent. The SSN cut off 2020 will be released soon after the exam is conducted and results are declared. But that date may be pushed up thanks to the ongoing unemployment crisis. The maximum withholding amount is adjusted each year by a formula based on cost of living increases. Another idea is to raise full retirement age, or the age at which seniors are entitled to their full monthly Social Security benefit based on their respective earnings records. That makes the corresponding monthly check $2,304 -- $24 higher every month. The monthly check will be $2,280. One idea is to raise the wage cap of $137,700 to a higher level, or even eliminate that cap altogether, so that Social Security is able to collect more payroll tax revenue. The 2019 retiree got 72 1/2% of their full retirement monthly benefit, or $1,305. In the coming years, Social Security is anticipating a revenue shortfall as baby boomers leave the workforce in droves and too few younger workers come in to take their place. Market data powered by FactSet and Web Financial Group. If those taxes are paid later on, it won't hurt Social Security too much, but if those deferred taxes are ultimately forgiven -- which the presidents says is his ultimate goal -- it could mean that the program depletes its trust funds much, much sooner than 2035. Those increases will continue until those born in 1960 and later have a full retirement age of 67. As an example, say that you're turning 62 in 2020 and were an above-average earner throughout your career, therefore qualifying for a full retirement monthly benefit of $1,800 from Social Security. Because the full retirement age applying here was 66 and six months, claiming at 62 is just 54 months early. More recently, another set of two-month incremental increases began a few years ago for those born in 1955. The consequences of full retirement age rising by two months aren't immense, which is why it's fair to characterize the move as a stealth Social Security cut. Returns as of 11/29/2020. Information for people who are working Social Security and Medicare taxes Social Security taxes. That will result in your getting a Social Security check each month equal to 71 2/3% of your full retirement amount, or $1,290. Staying aware of them is critical to make sure that you don't get any nasty Social Security surprises. 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