Changes to social security are often a scary prospect for those who are about to qualify for it or those who are already receiving it. Social security payouts comprise a very important financial lifeline to the retired elderly. As such, any changes are met with apprehension because many people currently rely (or will soon rely upon) on the entirety of that check for a large portion of their living expenses. That being said, let’s see what’s new for 2020!
1 – The Full Social Security Retirement Age Has Increased…Again
We knew this was coming, as the age for reaching social security has gradually been climbing up since the program’s inception in 1935. This is due to the fact that SS age requirements have shifted through the years because of factors such as increased life expectancy as well as basing retirement age on the year you were born.
For example, if you were born in 1937 or sooner, your retirement age is the original 65. This changes every few years until you hit 1955, where every year thereon up until 1960 the full retirement age increases by a few months. For example, if you were born in 1955, the full retirement age is 66 years and 2 months. From 1960 and later, you must be age 67 to retire.
2 – COLA Is Being Adjusted By 1.6%
This is a good or bad thing depending on how you feel about inflation. The cost of living adjustment (COLA) is a change that is meant to ensure that the payout given to retirees remains equal relative to the cost of living with respect to inflation.
COLA has been fairly stable, hovering in the sub 3 percent range in the past three years. In 2018 it was 2.0%, followed by 2.8% in 2019, and it is now 1.6%.
3 – Higher Monthly Payouts For High Earners
Taxes are what allow for Social Security to exist, therefore it only makes sense that when the maximum amount of taxable income for Social Security rises, so too does the payout for high earners with respect to that increase. Prior to 2020, the maximum amount of earnings was $132,900, for 2020 it has increased to $137,700—certainly not a meager amount. This also means that the monthly payout for high earners has gone up to a maximum payout of $3,011 a month.
4 – Early Filers Withholding Threshold is Higher
Filing early is something that is typically advised against as there are penalties for early Social Security filers. For example, In 2020 you’ll be allowed $18,240 in income before you are subject to withholding by the Social Security Administration if you file early.
Comparatively, you can earn $48,600 if you choose to retire at the full age before the SSA will begin to withhold anything.
Group Retiree Medical Benefits
Social Security knowledge is an important part of preparing for retirement or living as a retiree. Benistar is a nationwide leader in group retiree medical benefits, we want to ensure that companies have the best means of taking care of retirees or those who are soon to retire.
After a lifetime of work, no senior citizen should have to go without simple benefits such as prescription drug benefits which are incredibly important to quality of life.
Contact Benistar today to get started with benefits administration.