Social Security Changes

Recent political changes have led to social security changes. And, no matter how you feel politically, it’s important for you to be aware of these changes and what they could mean for you. 

No one, of course, can know how long these changes will last or what other changes will come in the future, but, for now, you should at least know about the changes that have taken immediate effect.  

Change #1: An Increase in Full Retirement Age

To start off with, there’s been a recent increase in the full retirement age. Now, that age is 66 years and two months. This is an increase of only two months, but many are speculating that the two month increase will double each coming year. Another related change to be aware of is that higher-end benefits will now have a cap between 124% and 132%.

Change #2: An Increased Cost of Living Adjustment

This year, seniors should see a very small increase in their Cost of Living Adjustment. The increase is very small, only 0.3%, but it’s an increase nonetheless.

Change #3: An Increase in Withholding Thresholds for Early Retirees

You may not have known this, but retirees who take early retirement benefits typically receive a reduction in those benefits if they keep working. The threshold for early retirees is getting higher this tax year. Now, early filers can earn as much as $16,920 before the withholdings start.

Change #4: Increased Disability Thresholds

One final change to be aware of is one that relates to the Social Security benefits paid to those who are disabled. Last year, disabled individuals had to earn $1,130 or less per month in order to get disability or less than $1,820 if they were blind. Now, these thresholds are higher. Non-blind persons can earn an extra $40 per month without penalty, and blind individuals can earn an extra $130 a month.

These are not all of the Social Security related changes that have taken place this tax year, but they are some of the major ones. If you have questions about these or other changes and how they may affect you, don’t hesitate to speak with your financial adviser for more information and advice on how to handle these changes.