Monthly Social Security Benefit Increase for 2017 and Medicare Part B is going up.

By Kirk Larson

Social Security Western Washington Public Affairs Specialist

 

Monthly Social Security and Supplemental Security Income (SSI) benefits will increase 0.3 percent in 2017.  The 0.3 percent cost-of-living adjustment (COLA) will begin with benefits payable to more than 60 million Social Security beneficiaries in January 2017. Increased payments to more than 8 million SSI beneficiaries will begin on December 30, 2016. The Social Security Act ties the annual COLA to the increase in the Consumer Price Index as determined by the Department of Labor’s Bureau of Labor Statistics.  The Social Security Act provides for how the COLA is calculated. To read more, please visit www.socialsecurity.gov/cola.

 

The standard Part B premium amount in 2017 will be $134 (or higher depending on your income). However, most people who get Social Security benefits will pay less than this amount. This is because the Part B premium increased more than the cost-of-living increase for 2017 Social Security benefits. If you pay your Part B premium from your monthly Social Security payment, your monthly premium can go no higher than the increase you receive to your monthly Social Security benefit. Social Security will tell you the exact amount you will pay for Part B in 2017. You’ll pay the standard premium amount if:

 

  • You enroll in Part B for the first time in 2017.
  • You don’t get Social Security benefits.
  • You’re directly billed for your Part B premiums.
  • You have Medicare and Medicaid, and Medicaid pays your premiums. (Your state will pay the standard premium amount of $134.)
  • Your modified adjusted gross income as reported on your IRS tax return from 2 years ago is above $85,000 for an individual or $170,000 for a couple filing a joint tax return amount. If so, you’ll pay the standard premium amount plus an Income Related Monthly Adjustment Amount (IRMAA). IRMAA is an extra charge added to your premium.

 

Most Social Security beneficiaries will not see a reduction in their 2016 monthly benefit amount because of the increase in the Medicare Part B premium. This is because the Social Security Act contains a “hold harmless” provision that protects most beneficiaries. The amount of the benefit payable between 2016 and 2017 will stay the same even though the Medicare Part B premium increases.

 

To learn more about Medicare Part B costs go to https://www.medicare.gov/your-medicare-costs/part-b-costs/part-b-costs.html at the Medicare webpage.

Monthly Social Security Benefit Increase for 2017 and Medicare Part B is going up.

By Kirk Larson Social Security Western Washington Public Affairs Specialist

Monthly Social Security and Supplemental Security Income (SSI) benefits will increase 0.3 percent in 2017.  The 0.3 percent cost-of-living adjustment (COLA) will begin with benefits payable to more than 60 million Social Security beneficiaries in January 2017. Increased payments to more than 8 million SSI beneficiaries will begin on December 30, 2016. The Social Security Act ties the annual COLA to the increase in the Consumer Price Index as determined by the Department of Labor’s Bureau of Labor Statistics.  The Social Security Act provides for how the COLA is calculated. To read more, please visit www.socialsecurity.gov/cola.

The standard Part B premium amount in 2017 will be $134 (or higher depending on your income). However, most people who get Social Security benefits will pay less than this amount. This is because the Part B premium increased more than the cost-of-living increase for 2017 Social Security benefits. If you pay your Part B premium from your monthly Social Security payment, your monthly premium can go no higher than the increase you receive to your monthly Social Security benefit. Social Security will tell you the exact amount you will pay for Part B in 2017. You’ll pay the standard premium amount if:

  • You enroll in Part B for the first time in 2017.
  • You don’t get Social Security benefits.
  • You’re directly billed for your Part B premiums.
  • You have Medicare and Medicaid, and Medicaid pays your premiums. (Your state will pay the standard premium amount of $134.)
  • Your modified adjusted gross income as reported on your IRS tax return from 2 years ago is above $85,000 for an individual or $170,000 for a couple filing a joint tax return amount. If so, you’ll pay the standard premium amount plus an Income Related Monthly Adjustment Amount (IRMAA). IRMAA is an extra charge added to your premium.

Most Social Security beneficiaries will not see a reduction in their 2016 monthly benefit amount because of the increase in the Medicare Part B premium. This is because the Social Security Act contains a “hold harmless” provision that protects most beneficiaries. The amount of the benefit payable between 2016 and 2017 will stay the same even though the Medicare Part B premium increases.

To learn more about Medicare Part B costs go to https://www.medicare.gov/your-medicare-costs/part-b-costs/part-b-costs.html at the Medicare webpage.

Social Security Benefits based on Deceased Spouse

 Dear Rajiv,

 My question on the radio concerned when a relative, age 63, still working, whose wife passed away four years ago, could collect one-half of his deceased wife’s social security. He plans on working until age 70 or so, and will want to collect his larger social security benefit at that time.

 Please advise when he should file to collect benefits, his wife’s and/or his own. You indicated that he could collect his wife’s benefit at age 66.

 Thank you so much for your great radio show and your time.

Regards,

 aka “Diane” from “Graham”

Hi Rajiv and Deanna,

Thanks for your note, Rajiv.  I hope you had a great Thanksgiving.

 Answer:

Deanna, Rajiv was definitely on the right track.  Until he is 66, his work will reduce or eliminate any Social Security payments.  At 66 that goes away, so he could take SS while continuing work.

As you know, your relative is eligible two ways, as a widower and as a worker in his own right.  The first step is to see which of these two amounts is bigger:  his widower benefit at 66, or his own benefit at 70.  (Those ages are when each benefit maximizes.)  He might know the amounts—at least roughly—or he can get them by calling or visiting SSA.

Assume that his own benefit at 70 is bigger.  Then he would file for the widower’s benefit at 66, and get 100% (not 50%) of his wife’s benefit.  Then at 70 he would take his own.

If the widower’s benefit is bigger, just take that at 66.

Neither of these pathways was changed by last year’s budget bill.

If he stops work before 66, he could immediately take the smaller payment, then switch to the bigger one at 66 (for the widower’s payment) or 70 (for his own).

Reference:  https://www.ssa.gov/planners/survivors/ifyou2.html, especially the second bullet under “When you should apply.”

He should be sure to run his plan by SSA before committing to it, for example when he applies at 66.

Hope this helps.  Best wishes for warm and meaningful holidays.

 Andy Landis

Thinking Retirement

 

 

Social Security Adjusted Payment

Hello Rajiv, I have not received an adjusted SSA payment for my earnings for 2015, I normally receive this in November of the following year (2016) I am receiving SSA payments at present (full retirement age) but am still working thus making SS payments via my paycheck. I seem to have this issue every year and cannot get any help from SSA web portal or with a telephone agent. I have heard Rajiv Nagaich talk about this on his radio show and was wondering if he had someone I could get help from at the SSA office in Seattle. Kindest Regards Emily Lea Reed

Hi Emily;

Here’s a response after consulting with my SSA contact:

Some background:  your Social Security payment is based on your highest 35 years of work, after inflation adjustment.  Each year in November, any new work from the previous year is automatically posted to your work record.  The new posting causes an AERO (Automated Earnings Reappraisal Operation), and if the new earnings are one of your top 35 years, triggers a raise in your Social Security.

This year, the AEROs have been performed, and notices are being sent to those affected.

Watch for your notice in the next few weeks.  If you don’t receive it by January 1, it’s possible that 2015 was not one of your top 35 earnings years.  If you believe otherwise, take your 2015 W-2 into your Social Security office and request a manual AERO.

Hope this helps, and best wishes for warm and meaningful holidays.

Andy Landis, Social Security Expert

Thinking Retirement

(206) 440-1998

[email protected]

www.andylandis.biz

Social Security Cost of Living Increase So Tiny You Won’t Notice It!

Here’s the good news about your Social Security cost of living adjustment (COLA) for 2017: there’s going to be one, unlike last year when the COLA was zero. But here’s the bad news: this year’s increase is so tiny, at 0.3%, you won’t even notice it.  Some experts have calculated that the average Social Security beneficiary may see a whopping $5 increase in benefits. Before you get too excited, as this article recently published by the Reuters news service points out, the entire increase is almost certainly going to disappear into higher premiums for Medicare.

As Reuters puts it, “The Social Security COLA has lacked fizz for much of the past decade,” having remained less than 2 percent in every year but one since 2009. For three years the COLA has been non-existent. This puts a burden on seniors, many of whom are on fixed income (half of Medicare recipients live on less than $24,150 per year, said a 2014 report from the Kaiser Family Foundation). As any senior will tell you, prices definitely do seem to be on the rise, so why doesn’t the Social Security COLA reflect actual market conditions?

Turns out that the culprit is the law that sets the standard by which the cost of living adjustment is calculated. Social Security COLA is determined based on what’s called the CPI-W, which is shorthand for the Consumer Price Index for Urban Wage Earners and Clerical Workers. This index includes a measure of several costs for goods and services purchased by average working men and women, and it is weighted accordingly. For the past several years, one factor has been chiefly responsible for the CPI-W remaining suppressed: low energy prices. According to one expert quoted by Reuters, Max Gulker from the American Institute for Economic Research, “If you look category by category at prices that are up or down, energy is what is pulling things down overall.”

The trouble for seniors, especially retirees on Social Security, is that they benefit far less from low energy prices because they tend to drive less. Low energy costs are less of a boon to older Americans than to most working adults. On the other hand, seniors spend more than twice as much on medical coverage as the rest of the population, research shows, and yet skyrocketing medical costs are not adequately reflected in the CPI-W. Max Gulker told Reuters that “The categories that are really rising are healthcare and education costs.”

As a response, the experts at the Bureau of Labor Statistics (the ones who calculate the CPI-W) have developed an experimental index called the CPI-E, or Consumer Price Index for the Elderly.  This index is weighted toward the things seniors spend their money on, such as health care. Advocates for seniors are pushing for the adoption of a fairer standard such as the CPI-E for calculating the Social Security COLA, but so far without much success. (Speaking of medical costs, the Reuters article explains in some detail how Medicare premiums for Part B and Part D will be going up this year. Since the law protects current beneficiaries from having their Social Security benefits reduced, and since the cost of living adjustment is so measly, most of that higher Part B cost will be borne by new enrollees. Again, click here to read it.)

So what’s the long-term solution?  Reuters suggests (somewhat optimistically) that “the COLA mess” has to be part of a broader political conversation about Social Security reform. Other more short-term proposals include one by Senator Elizabeth Warren (D-Mass) to provide a one-time “emergency COLA” of 3.9 percent, which she says equals the average raise given to top CEO’s last year. In today’s political climate, who can say how or when these ideas will be debated? But it does suggest that seniors ought to be using their considerable political clout to force policy-makers from both parties to get serious about a system that clearly needs to be reexamined.

Do you have questions about Social Security or Medicare? We invite you to call our office any time. Our experienced professional staff can help you decipher your choices and make the decisions that are best for you. In fact, no matter what your questions about retirement, from housing choices to financial planning to legal affairs to family communications, AgingOptions will be your best resource. We offer a unique approach to retirement planning that we call LifePlanning – an approach so comprehensive that it encompasses all these needs we’ve just listed, and many more. Don’t head into retirement without a plan, and don’t give up because these decisions seem so complex! With us as your guide, together we can navigate through the circumstances that are unique to your situation and create the perfect plan for you.

There’s a simple, no-obligation way to find out more: attend one of our free LifePlanning Seminars. You’ll come away with a clear understanding of just how beneficial LifePlanning can be. Click on the Upcoming Events tab for details and registration, or call our office and we’ll gladly assist you. We’ll look forward to meeting you at a LifePlanning Seminar in your area soon!

(originally reported at www.reuters.com)

HIT A HOME RUN WITH SOCIAL SECURITY

By Kirk Larson Social Security Washington Public Affairs Specialist

A home run is a highlight of any baseball game. The fans cheer with excitement to see a player rocket the ball into the stands. So, what are you doing to prepare for your retirement home run? Your goal should be to get past 1st, 2nd & 3rd base and make it home with a hefty plate of savings. Social Security has many tools to help you achieve financial security.

Take the first step and visit www.socialsecurity.gov/myaccount. The benefit of having a my Social Security account is that it gives you access to your personal Social Security Statement, verification of correct earnings, and an estimate of your early retirement benefits at age 62, full retirement age of 66, and delayed age at 70.

We protect your information by using security features and strict identity verification to detect fraud. In several states including the newly added Idaho, Mississippi, and North Dakota, you can request a replacement Social Security card online. Find out if your state offers the service at www.socialsecurity.gov/ssnumber.

In addition to using your personal my Social Security account to prepare for a comfortable retirement, you can visit www.myra.gov. At myRA, you can access new retirement savings options from the Department of the Treasury. This service is designed for the millions of Americans who struggle with saving for retirement — it’s an easy and safe way to help you take control of your future.

myRA is designed for people who don’t have a retirement savings plan through their employer, or are limited from other savings options. If your employer provides a retirement savings plan, such as a 401(k), learn more about that plan’s potential for matching contributions or other benefits.

Since myRA isn’t connected to any employer, it allows workers to hold on to it when they move to different jobs. myRA makes your money grow faster than a traditional savings account. Having both my Social Security and myRA accounts in place, you’re guaranteed to hit a home run in successfully planning for your future. Learn more about all of your choices at www.socialsecurity.gov.

NEWS FOR SAME-SEX COUPLES ABOUT SOCIAL SECURITY

By Kirk Larson Social Security Washington Public Affairs Specialist

The Supreme Court decision in Obergefell v. Hodges, holding that same-sex couples have a constitutional right to marry in all states, resulted in Social Security recognizing more same-sex couples as married. This is important for determining entitlement to Social Security benefits or eligibility for Supplemental Security Income (SSI) payments. We recently updated instructions for employees to process claims and appeals when a determination of marital status is necessary. As part of the new instructions, we have:

• Removed from our policy any mention or consideration of the dates when states first recognized same-sex marriages from other states. These dates are no longer relevant.

• Added the dates when some foreign jurisdictions allowed same-sex marriage, thereby eliminating the need for a case-specific legal review in many foreign same sex marriage claims.

• Updated and simplified our procedures for processing claims involving a transgendered or intersex person, allowing these individuals to self-identify as members of a same or opposite-sex marriage.

• Streamlined and clarified the policy instructions, addressing questions raised by advocates and employees.

We encourage anyone who believes they may be eligible for benefits to apply now. Learn more at www.socialsecurity.gov/same-sexcouples.

LISTEN AND LEARN ABOUT SOCIAL SECURITY. FREE AUDIO PUBLICATIONS FOR YOUR CONVENIENCE

By Kirk Larson Social Security Washington Public Affairs Specialist

Perhaps you’ve been planning to read that booklet on Social Security benefits for some time now, but you never seem to find the time to sit down with it. If only you could listen to an audio version, just as you might listen to the latest novel by your favorite author on audio book. Now you can. Social Security offers more than a hundred publications in audio format, in both English and Spanish. You can find them at https://www.ssa.gov/pubs/audio/audio.html and https://www.ssa.gov/pubs/ or you can call (800) 772-1213 for assistance. At Social Security, we want to make sure you can get the information you need. That is why we offer our publications in print, online in both Internet and PDF versions, and some in audio format. You also can get publications in Braille, in enlarged print and even cassette or CD. If you are blind or visually impaired and are having trouble reading a notice we sent you in the mail, you can ask a Social Security representative to read it and explain it to you. You can contact us as many times as you want to get an explanation. Social Security is committed to using technology to improve the customer service experience. Learning about any aspect of Social Security’s programs is easier than ever, in the format that works best for you. These days, you can even get a personalized estimate of your future benefits and apply for those benefits online. From the comfort of your home, you can access information about Social Security. Take it a step further and use the audio publications in combination with the Frequently Asked Questions (FAQs) section to get answers to over 700 questions. If you were planning to plug in the ear buds and listen to a little music tonight, why not play the Social Security publication you’ve been putting off? It’s never been easier to learn about Social Security. Just visit our webpage and you can learn about Social Security programs at www.ssa.gov. Welcome to our online library. Whatever your preferred format, we’re here for you.

Some Experts Ask, “Should You Really Wait to Claim Social Security?”

On the CNN financial website this week (money.cnn.com), we found an interesting article that asks a provocative question: “Is 70 Too Late to Claim Social Security?” This question sounds almost heretical, since most experts advise people to wait as long as they can (ideally until 70) before starting their benefits, but as the article points out that actually might not be the best strategy for every retiree.

You can click here to read the CNN article. It was written for CNN by the financial experts at the popular website Motley Fool. We present it here merely as food for thought. As with any financial advice of this magnitude, we urge you not to take action until you’ve carefully reviewed your options with a professional planner. You can contact us here at AgingOptions any time to discuss Social Security strategies along with any other retirement-related questions.

The CNN article acknowledges that choosing when to take Social Security is “one of the most important decisions you make about your retirement.” As most of our readers and radio listeners know, people born in 1954 or earlier can claim benefits as early as age 62 (assuming no disability payment is involved). Full retirement age is considered to be 66. Benefits increase at about 8 percent per year between 66 and 70, so waiting to take benefits is generally considered a sound idea (even though only a small percentage of retirees actually do so – estimated at well below 10 percent of beneficiaries).

But according to CNN, the “time value of money” may dictate that having smaller checks over a longer period of time might be better than receiving larger checks over fewer years. The argument, in simple terms, goes like this: if you wait until age 70 to start Social Security benefits, it will take you about a decade, or until about age 80, to have collected as much as you would have had you started benefits earlier. So in essence, by waiting for maximum benefits, a retiree is gambling on how long he or she will live. CNN suggests some might be better off taking those Social Security payments early, investing them, and enjoying a larger nest egg for the remainder of their lives.

However, there’s a big “if.” The CNN article says this “start early and invest” strategy works well “if other sources of retirement income allow you to invest your Social Security income.” In other words, if you don’t need Social Security to live on, putting it all into investments is a good plan. The reality in our experience, though, is that this idea is a luxury most retirees can’t afford and probably should not do. Studies estimate that, for single retirees, nearly half count on Social Security for 90% of their income. And because many adults still are not preparing adequately for the financial demands of retirement, the situation seems unlikely to change. (This was covered in a recent article on our blog, and you can click here to read it.)

When it comes to investing, there’s also the problem of self-discipline. The experts at CNN suggest you might benefit from investing those early Social Security benefits, but too many people in our experience end up spending those dollars instead, either out of necessity or by choice. In other words, in spite of the best of intentions, those so-called investment dollars get spent elsewhere, and the retiree is left with lower Social Security benefits for life (not to mention lower spousal benefits as well).

Before you take a risk with something as vital as Social Security, we urge you to get professional and unbiased advice. That’s what we’re here for. At AgingOptions we will walk alongside you through the many complex questions about retirement planning and help you make the choices that are right for you. This applies not only to your finances but also to important facets of retirement planning such as housing options, legal affairs, health care coverage and family communication. For everything from choosing a geriatric physician to deciding if a reverse mortgage is right for you, the professional team at AgingOptions stands firmly on your side.

A great way to get a no-obligation overview to the AgingOptions approach to retirement planning is by attending a free LifePlanning Seminar. We offer these popular, information-packed sessions at locations throughout the area. Register online on the Upcoming Events tab, or call our office for questions and assistance. We will welcome the opportunity to be your guide and advocate through the exciting journey of planning for your retirement years.

(originally reported at http://money.cnn.com)

 

 

Not Much Good News (Yet) Concerning the 2017 COLA for Social Security

The recent story in the news was such a non-event, you may have missed it. The Social Security Administration just released its projected cost-of-living adjustment, or COLA, that will theoretically affect Social Security payments in 2017. Last year, due largely to a drop in gas and oil prices, those on Social Security received a zero COLA – no adjustment at all. This year, even though we’ve just entered the third quarter of 2016, Social Security officials are out with their projections based on current consumer prices. The big prediction: benefits will go up by 0.2 percent. For the average recipient, that’s a whopping $2.69 more per month, about the cost of a gallon of regular at the pump.

Here’s an article with some good technical data about this development from the financial website The Motley Fool. For a slightly more down-to-earth take on this story you can

click here to see what the popular newspaper USA Today has to say.

Anything that affects Social Security impacts a huge number of Americans – some 60 million at last count, two-thirds of whom are retired. As The Motley Fool puts it, the annual cost-of-living adjustment is “among the most closely-watched Social Security figures.”  Under current laws, Social Security payments don’t get reduced if consumer costs go down, but they also don’t go up if the gauge used by Social Security administrators remains constant. And therein, says The Motley Fool, lies the problem.

Without going into too much detail, the Social Security COLA is based on what’s called the CPI-W, or Consumer Price Index for Urban Wage Earners and Clerical Workers. But many senior advocates, not to mention retirees themselves, argue that the CPI-W is the wrong gauge to use. Instead they advocate switching to the CPI-E, or Consumer Price Index for the Elderly, which “takes into account the spending habits of adults age 62 and over,” says The Motley Fool. Seniors, for example, spend twice as much as urban wage earners on medical care, and healthcare inflation continues to skyrocket, leaving seniors with less and less purchasing power. Seniors also drive less, so they derive less benefit from lower gas prices. The bottom line is that most seniors are suffering in their bottom line! The article in USA Today says seniors have lost nearly a fourth of their buying power in the past decade and a half. Clearly a tiny cost-of-living adjustment isn’t going to help very much.

Both articles we’ve linked you to have suggestions on how to deal with the drop in purchasing power being faced by today’s seniors. USA Today suggests some basic ideas on reducing spending and boosting income. The Motley Fool piece has a somewhat more technical approach. But in both cases planning is the key. Sitting back and relying too much on Social Security alone can be a costly mistake.

Helping retirees (and future retirees) plan for a secure and fruitful future is our passion here at AgingOptions. We love the process of walking our clients through the details of what we call LifePlanning. What makes a LifePlan different from all other retirement plans? A LifePlan is truly comprehensive and inclusive. Too many so-called retirement plans only deal with the financial aspects of retirement, and they often do a poor job of that. At AgingOptions our LifePlanning approach helps you maintain financial security, plan for your medical needs, make informed housing choices, ensure that your legal affairs are in order, and guarantee that your loved ones are well informed of your wishes. By following a LifePlan, your assets are protected, and your retirement dreams secure.

If this sounds like the plan you’ve been searching for, then take a simple next step: register now to attend a LifePlanning Seminar at a location near you. These lively seminars are completely free and absolutely without obligation. To register, click on the Upcoming Events tab, or contact our office. We’ll look forward to working with you to plan your retirement future.

(originally reported at www.fool.com and www.usatoday.com)