A few years before the first Baby Boomers were born, the Social Security Administration was one of several governmental programs designed to assist the population. For decades, these funds have benefited retirees and disabled folks, with 60 percent of seniors relying on the SSA for half or more of their income.
Annually, the SSA, like most other agencies and companies, adjusts their benefits and services based on changes in the economy, laws, and other influential factors. In 2017, that means that more than 60 million folks will be impacted by these changes:
Rise in Payments
Each year, the Social Security Administration makes a cost-of-living adjustment for recipients. In January 2017, that increase will be 0.3 percent. This modest amount will come out to five bucks or so for the average person receiving payments.
For those who are receiving Social Security payments due to retirement after decades in the workforce, the additional income is in line with inflation. In fact, the agency makes sure each year to adjust the amount based on the Consumer Price Index for Urban Wage Earners and Clerical Workers for consistency.
Cost-of-living adjustments (COLA) are impacted for seniors and disabled applicants. Because the eligibility rules are based partially on income, the new figures could impact those who are in the application process. If an SSDI applicant goes over a certain amount per month, they cannot receive benefits.
Individuals who are blind are considered to have Substantial Gainful Activity if their income is equal to or greater than $1,950. Those who are not considered blind by the agency can make $1,170.
Some folks can earn money through a job while receiving SSDI payments in certain situations, such as a Trial Work Period. During 2017, the monthly amount is $870.
As for monthly financial resource maximums, the amounts remain unchanged, with an individual being capped off at $2000 and a couple at $3000.
Maintain Benefits While Earning More
If you are among the folks who continue to work after retiring, it is important to understand how this will impact your benefits. Although the retirement age is currently 66 years of age, remember that the government is slowly extending that to 67 for those born in and after 1960.
Use a calculator to ensure that you understand the amount being withheld based on your income.
Wealthy Contributors Paying More Now
One of the best things in the minds of many to come out of the changes is this rule. Earned income for citizens is set at 12.4 percent, which many wealthy folks have found a way to get around for years. The cap was placed at a high enough amount that it did not impact most folks. However, those who made more than the $118,500 limit certainly appreciated not having to pay that same amount that the rest of folks have.
So, that means that for most people, those who earn $118,500 or less per year, they are paying out the legally required 12.4 percent on each and every dollar earned. However, those that made more money than that were subject to taxation only on the same $118,500 as everyone else. While the dollar amount may seem the same, the percentage of income paid in taxes quickly becomes disproportional.
This payroll cap will rise this year to $127,200. For most folks, this will not have an impact when filing taxes. However, those who are earning more than this amount will see a difference. The total of the payments comes to $1079, an amount your employer is likely to split with you. This means you will see the social security office taking more than five hundred additional bucks from your pay each year.
As for those who are self-employed, the jab is even sharper, with the entire grand plus falling entirely on the shoulders of those independent contractors and small business owners.
Improved SSA Application Management
Various loopholes and strategies originally designed to benefit retirees have been taken advantage of by those savvy enough to discover and implement them. These legal plots involved the application and suspension of applications in such a way to manipulate and maximize the benefits a person received.
However, the government has tightened up these loopholes and prevented these strategies from being effective in the future. While it should be noted that some folks have already begun the process and may be allowed to follow the previous rules as a result, no new cases will wiggle through these. This is just one strategy the SSA is using to improve long-term operations.
Work Harder for Maximum Benefits
If you are expecting social security payments to support you when you retire or by chance become disabled, you will have to start working more. Before retirement, you must earn at least 40 credits in your life with the administration. You can earn up to four each year. This past year, you needed to make just over five grand each year, at $1,260 per quarterly work credit. The amounts have jumped by a total of $160 for the year, which means that some workers might need to add work hours to their schedule to maintain their retirement plans.
The Social Security Administration makes annual updates to the system that impact recipients and those interested in future benefits. If you are planning to retire soon, these five changes could impact your decisions. Speak to an expert and continue to learn more to ensure you make the right choices for your financial future.
Please feel free to contact the Kenneth G. Marks Law Firm for a free consultation.
Kenneth G. Marks Law Firm
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