2017 is now well underway, and as is the case with many things, a new year means that there have been some changes in Social Security. If you’re a worker paying into Social Security, if you’re retired and collecting Social Security, or if you’ve been injured and are collecting disability benefits, you might be wondering what those changes are, and how they could affect you. While we can’t discuss in detail every single change made, we have assembled a list of some of the most important changes you need to know about, and how they could impact your life.
1) The Full Retirement Age has Increased
For a while now, the age of which one could retire and receive full Social Security benefits was 66. Now, that is changing. For those born in 1955 or after, the full retirement age is now 66 years and 2 months. Why is this important? Well, for one obvious reason, it means if you want to collect your full benefits you need to work two more months. A second, and less obvious, effect of this concerns those who collect benefits early. The earliest age at which you can collect benefits — 62 — still has not changed. However, because this is now four years and two months away from full retirement, it means that those who elect to receive their benefits when turning 62 will receive less per month, since they are farther away from “full” retirement.
And, it’s not hard to assume that in future years we will see that “full” retirement age creep even higher.
2) A Slight Increase in Payments – Which You Probably Won’t Even See
Great news! Your monthly payments have been given a COLA (Cost of Living Allowance) increase to reflect inflation! How much? Well, there’s the kicker: this COLA increase is a very modest 0.3%. That means that the average payment will increase in 2017 just a little over $4 a month, to right around $1,360.
Before you put in that down payment on a pool, though, you should also know that with this raise there is also an increase in monthly Medicare premiums. The cost of the increase? Right around $4 a month. So, this means that in most cases, you will hardly see any sort of change at all. If you have an above-average monthly benefit, you might see a small increase, and a lower than average benefits might see a minimal decrease, but that is about it.
3) An Increase in the Salary Cap
Here’s a change that will affect those of you with healthy salaries: the cap on how much of your income can be taxed for Social Security is increasing. Whereas before the cap was set at $$118,500 per year, and anything above that did NOT pay into the Social Security fund, the cap has been raised in 2017 to $127,200. This means that some people will pay up to $540 more a year into the Social Security system.
If you have any questions as to how these or other changes might affect you in 2017, please don’t hesitate to contact us today!