Millions of Americans rely on Social Security right now for their financial security, and millions more will need Social Security benefits in the years to come. But new changes to Social Security have just taken effect, and it's smart to know how Social Security changes for 2014 could affect you and your benefits.
In the following video, Dan Caplinger, The Motley Fool's director of investment planning, goes through the recent Social Security changes for 2014. Dan notes that while the tax rate of 6.2% on employees hasn't changed, the wage base on which that tax is calculated has risen to $117,000. He also goes through the rise in earnings to $1,200 that's necessary to get a quarter of creditable coverage for Social Security purposes. Those younger than full retirement age who still earn wage or salary income will get a break, as the amount of income they can earn without forfeiting their benefits has risen to $15,480 this year. Finally, Dan goes through the average and maximum benefit amounts, noting that the maximum Social Security benefit this year for someone taking benefits at full retirement age has jumped to $2,642 per month, while the average benefit has risen to $1,294.