WEEKLY FOCUS – Changes to Social Security for 2015 If you are already receiving Social Security, then you may be aware that monthly Social Security benefit checks for you and nearly 60 million Americans will increase by 1.7 percent for cost-of-living adjustments (COLA) for 2015. The estimated average monthly Social Security benefits payable to all retired workers starting in January will be $1,328, up from $1,306. While this is good news for those already receiving Social Security, it is not as exciting for the nearly 10 million American workers who will now be paying higher Social Security taxes. To pay for the COLA increase, the Social Security Administration (SSA) increased the maximum amount of earnings subject to Social Security tax by about 1.28 percent to $118,500 for 2015 from $117,000 in 2014. The Department of Labor’s Bureau of Labor Statistics sets the Consumer Price Index, and the annual COLA adjustment uses that benchmark along with changes in the price of food, housing, clothing, transportation, energy, medical care and more, to calculate increases. Social Security allows retirees to work and earn income while also receiving benefits. The benefits are reduced, however, for retirees below full retirement age (defined as 66 for people born in 1945 through 1955) who earn more than a certain amount. For 2014 tax returns, that amount is $15,480; for each $2 earned over that limit, benefits were reduced by $1. The earnings limit for 2015 has been increased to $15,720. At full retirement age, benefits are increased to account for the amount withheld earlier due to the earnings limit. However, if you wait until full retirement age to begin receiving Social Security benefits, your benefits are not subject to the earnings limit – so you can work and receive full benefits. While Social Security is typically just a small part of your overall retirement plan, changes to both Social Security benefits and taxes can have a direct effect on retirement income and savings. Contact our office today for a review of your portfolio to see how these changes might affect your individual situation *written by Securities America
Posted on: Mon, 27 Oct 2014 19:01:06 +0000
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