The Social Security Administration announced that the maximum earnings subject to the full 6.2% FICA tax will be $113,700 in 2013, up 2.8% from the $110,100 in 2012. Note that the FICA tax itself had been reduced temporarily to 4.2% in 2012. Next year, the full 6.2% will be collected from the employee, so the maximum FICA tax itself could take as much as $2,425 from many employees. There is no maximum dollar limit on the 2.9% medicare tax (1.45% for employees and employers).
Meanwhile, social security recipients will see only a 1.7% cost-of-living increase in their benefit payments. I’ll leave it to you to form your own opinion on whether or not this makes social security a Ponzi scheme or not.
