The Social Security Administration announced that there will be no automatic increase in 2016 since there was no increase in the Consumer Price Index from the third quarter of 2014 to third quarter of 2015. With this said the tax rate for Social Security will stay the same at 6.20% and the maximum taxable earnings will remain at $118,500 for 2016.
Other items that remain unchanged are the retirement earnings test exempt amounts. If you are under the full retirement age, the amount is $15,720 and $1 of benefits will be withheld for every $2 in earnings above this limit. For the year an individual reaches full retirement age, the test exempt amount is $41,880 and only applies to the months prior to attaining full retirement age. For this amount, $1 will be withheld for every $3 in earnings above the limit.
By Chris Morrison