The SSA pays retirement benefits and disability benefits, the latter based on a medical record analysis. Here are 5 changes to the program in 2020.

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5 Possible Changes to Social
Security Benefits in 2020
The SSA pays retirement benefits and
disability benefits, the latter based on
a medical record analysis. Here are 5
changes to the program in 2020.
MOS Medical Record Reviews
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Tulsa, OK 74133

2. www.mosmedicalrecordreview.com 918-221-7791
Social security benefit programs are designed to provide a solid financial foundation
for the nation’s disabled and retired workers. Social security disability benefits paid to
disabled workers based on medical record analysis get automatically converted to
retirement benefits once the beneficiary reaches full retirement age. Around 45 million
retired workers that make up 70% of all beneficiaries, receive a benefit check every
month. The majority of these seniors depend on their social security payout for at least
half of their income. Therefore any changes and updates made to social security benefits
are highly significant for those receiving the benefits. Usually, any such changes to the
program are announced during the second week of October every year.
So, what are the expected changes for the year 2020 which the SSA (Social Security
Administration) would announce in October this year? Here is a compilation by Sean
Williams in his Motley Fool article.
• Increase in COLA (Cost-of-Living Adjustment): According to the Senior Citizens
League, a nonpartisan group advocating for seniors, the COLA for 2020 is projected
at 1.7%. As a result, the average retired worker can expect an increase of about
$25 a month, based on the average payout of $1,471 a month as of June 2019. The
COLA is the most significant figure in the SSA’s October announcement, and is a
means of the SSA quantifying how much inflation its beneficiaries had to deal with
in the current year and how much the benefits will rise in the coming year to
compensate for this inflation.
• Increase in maximum monthly benefits: A retired worker who has earned a good
amount of money on an annual basis over his/her working career may be able to
enjoy an increase in monthly benefits in 2020. Social Security has placed a limit on
the maximum monthly payout at full retirement age. In the year 2019, no one at
their full retirement age can take home more than $2,861 per month, regardless of
the millions of dollars they may have made each year throughout their working
career. However, it is expected that in 2020, well-to-do beneficiaries who had
reached the maximum taxable earnings cap in each of their 35 accounted years of
work would receive a bit more than $2,861 a month.
• Early filers could see a rise in withholding thresholds: Early filers signify those
who file for benefits before reaching their full retirement age. Such claimants who
have not yet reached their full retirement age but are receiving benefits, will be
subject to a Retirement Earnings Test. This test allows early filers to earn up to a
certain amount of money before the SSA is allowed to withhold a portion or all of
their benefit. Beneficiaries who won’t reach their full retirement age in 2019 will

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have $1 withheld for every $2 in earnings above $17,640 ($1,470 a month). Those
who will reach their full retirement age in 2019 but have yet to do so, are allowed
to earn $46,920 before the SSA starts withholding $1 for every $3 in earnings above
this threshold. In years where COLA is positive, the income thresholds when
withholding begins would rise modestly.
• Disability income thresholds may increase: Over 10 million people receive SSDI
(Social Security Disability Insurance) each month and among these 8.5 million are
disabled workers and the rest spouses and children of these disabled workers. SSDI
beneficiaries are not allowed to earn more than a certain amount of income per
month. In 2019, a disabled beneficiary can earn up to $1,220 a month.
Beneficiaries who are legally blind can earn up to $2,040 a month. These two
figures rose $40 a month and $70 a month respectively, from the year 2018. Since
the average CPI-W reading increases on a year-over-year basis from the previous
year, the SSDI income thresholds for the disabled and legally blind should increase
modestly in 2020.
• Wealthy workers may have to pay more into Social Security: The payroll tax on
earned income provides the maximum income to the social security benefits
program. In 2018, this was $885 billion out of $1 trillion. This payroll tax of 12.4% is
affixed on earned income between $0.01 and $132,900 in 2019; the upper limit is
known as the payroll tax cap. The payroll tax cap adjusts annually according to the
National Average Wage Index except in years where deflation occurs. Since the
COLA seems positive in 2020, the payroll tax cap may increase next year. This
won’t have a major impact on the large majority of the workforce because most
workers do not earn $132,900 or more a year. However, those earning more than
that may have to pay a bit more into the program in 2020. The cap may rise to
$135,000 to $136,000.
Social security attorneys, providers of medical review services that support attorneys in
reviewing disability cases, and social security beneficiaries have to stay updated on the
periodic changes the SSA announces to their welfare program.