Here’s what Social Security changes to look for in 2015.
- In October, the Cost of Living Adjustment (COLA) for Social Security was raised 1.7 percent, adding roughly $22 more each month for the average Social Security beneficiary. With that increase the average monthly retirement benefit for all recipients rose to $1,328.
- Workers taking retirement benefits early can earn up to $240 more in 2015 (up to $15,720 or $1,310 per month except in the month the worker reaches full retirement age, that number is $41,880 or $3,490 per month) before seeing a temporary reduction in payments.
- At the other end of the scale, the amount of wages subject to Social Security taxes increased by $1,500 to $118,500. (To find out whether or not your wages are subject to Social Security taxes, read Social Security taxes, who pays them, who doesn’t. Five states tax up to 85 percent of Social Security taxes but many others provide exemptions such as in Iowa where the state Social Security tax was phased out beginning in 2006. Moves such as converting a traditional IRA to a Roth IRA after you begin collecting Social Security can inadvertently boost your income and increase your Social Security taxes so make sure that you have a conversation with your financial planner to find the most cost efficient way to spread the conversions out. Minimum distributions on your IRAs can likewise push you into a higher tax bracket if you haven’t planned accordingly.
- Paper statements will once again be mailed out to at least some workers (those that turn 25, 30, 35, 40, 45, 50, 55 and 60 who will receive a statement three months before their birthdays. (Everyone can access their statements by going to my Socal Security and creating an account.
- The maximum Social Security Benefit rose from $2,642 per month to $2,663 per month.