Social Security taxes will be withheld from earnings up to $87,900 in 2004, up from $87,000 in 2003. As before, the tax rate will be 6.2 percent, for employers and employees. The Medicare tax rate remains at 1.45 percent, which is applied to all earned income.
On the benefit side, Social Security recipients will get a 2.1 percent cost-of-living increase in their monthly checks in 2004, reflecting low inflation in 2003. According to the Social Security Administration, the average retirement benefit will be $922 a month in 2004 while the average retired couple will receive a total of $1,523 per month.
Anyone who earned enough to receive the maximum retirement benefit at full retirement age will receive $1,825 per month in 2004, or $21,900 per month. Note that the full retirement age moves up to 65 years and four months, for those born in 1939 and reaching age 65 in 2004.
