Social Security benefits will increase 3.5% in 2001, beginning with payments that Social Security beneficiaries receive in January 2001. For Social Security beneficiaries, the average monthly benefit amount for all retired workers will rise from $816 to $845 in 1001. For a married couple receiving two benefits, the average payment will be $1,410 per month. Workers who consistently earned the maximum amount subject to Social Security will receive $1,536 per month, if they retire at age 65 in 2001.
On the flip side, the maximum amount of earnings subject to the Social Security payroll tax will increase to $80,400 from $76,200. Thus, the maximum yearly Social Security tax paid by employees and employers will increase by $260.40 each, to $4,984.80. For self-employed workers, it will rise by $520.80, to $9,969.60. In addition, all earnings are subject to a 2.9% Medicare tax, split between employers and employees.