2016 Social Security Outlook and Upcoming Changes
The 2016 Social Security outlook is in and sadly the U.S. government has announced that there will be no payment increase to those receiving Social Security payments. The government also announced some changes in the way the system operates for next year. Here are a few of the changes announced.
Payment Increases: There are no projected payment increases for 2016. This is just the third time in Social Security history that there will not be a payment increase. The calculation formula used by the Social Security administration relies heavily upon inflation, and with the drop in gasoline and oil prices for the past year, the inflation portion of the calculation did not warrant an increase in payments. The last two times that happened was in 2011 and 2010.
Average Monthly Payments: The average monthly payments for retired workers is approximately $1,341 and for retired couples, $2,212.
Tax Cap and Earnings: Since there will not be an increase in earnings, there will also NOT be an increase in the maximum earnings being taxed by Social Security. Therefore, just like in 2015, next year the cap for earnings being taxed will remain at $118,500.
As for Americans who are working while receiving Social Security, the limit for additional income will be as follows:
Ages 65 and under: $ 15,720 – after that you will be subject to having $1 withheld in payments for every $2 above $15,720 in earnings.
Age 66: The earnings limit goes up to $41,880 and then it is $1 withheld for every $3 dollars you earn.
Age 67 and up: The earnings limit no longer applies.
Medicare premium increase: If you are already retired and receiving Social Security benefits, you will not be subject to an increase in Medicare Part B – however, for people newly signing up for Social Security benefits and increase in premiums (yet to be determined) may apply.
Longer Office Hours: Social Security office hours will continue to operate on the expanded hours set back in March of 2015.
Remember that Howard Law PC is here to help you if you are having an unresolved issue in the area of Social Security disability benefits.