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Understanding Social Security’s “Wage Base Limit”

Although it affects a small minority of wage earners, the limit set on FICA tax applied to earnings is something that should be understood by anyone interested in how Social Security is financed. I fact, as proposals to address the program’s long-term funding problem surface, it’s important to understand what changes in this finance limit can affect the program in the long run. For example, the congressional proposal now being debated in Congress (H.R. 860 (the Social Security 2100 Act) calls for creation of a “donut hole” from the current (2019) limit of $132,900 to $400,000, with FICA assessed to earnings above the $400,000 level.

The Motley Fool’s Christy Bieber examines the mechanics associated with the Wage Base Limit in a post Check it out here…


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