Social Security benefits to rise 3.3 percent
Further, 11 million workers will be paying more into Social Security because of an increase in the taxable maximum on wages.
NEW YORK (CNNMoney.com) -- The more than 53 million Social Security beneficiaries will receive a 3.3 percent cost-of-living adjustment in 2007, the Social Security Administration reported Wednesday.
And for the 163 million workers who pay into Social Security with every paycheck, the first $97,500 of their earnings will be subject to the 12.4 percent Social Security tax, half of which is typically paid by the worker and half by the worker's employer.
That's up from the taxable maximum of $94,200 this year. The SSA estimates 11 million workers will pay higher taxes as a result of this increase.
Six-figure earners currently pay $5,840.40 a year into Social Security, assuming their employer picks up half their Social Security tax. Next year they will pay $6,045, or an extra $204.60.
In addition, all of a worker's earnings are subject to the 2.9 percent Medicare tax, half of which is typically picked up by the worker's employer.
The cost of living adjustment in Social Security benefits will increase the average payment to $1,713 a month for a married couple in which both receive benefits. That's up from $1,658 this year.
A widowed mother with two children will see her benefit increase to $2,167 from $2,098, on average, while the widow or widower without dependents will see a benefit increase to $1,008 from $976.
The maximum Social Security benefit any worker retiring at full retirement age will receive in 2007 will be $2,116 a month, up from $2,053 this year.