Social Security - Your BenefitsSubmitted by QSSA - Better Financial Solutions for Life on February 8th, 2017
Is your Social Security yours?
The importance of Social Security and Medicare (entitlement programs) cannot be overstated. Entitlement programs could be some of the biggest debates under the Trump Administration. Although on the campaign trail Trump said he does not want to cut Social Security or Medicare benefits, there are many different views both within his party and from the Democrats’ party about how to deal with this thorny issue. While Social Security is a retirement plan and Medicare is a Federal Health Insurance program, they are closely intertwined and both programs are critical to the well being of many senior citizens during their retirement. Medicare rules could have a big impact on your social security benefits and unlike social security; Medicare has no earned income cap on the tax you pay. Additionally, Medicare has not yet increased the age (65) you are entitled to receive benefits.
You need to understand your options for collecting both
Medicare and Social Security benefits.
Know what you are entitled to, don’t pay late enrollment penalties and get what is yours!
There is a lot of conversation about the social security program going broke and many people speculate there will not be any money left when they’re ready to retire. In my opinion, you should be involved in the discussion, but don’t get overwhelmed. There are many political land minds in this discussion so it will take a congress with political fortitude to make significant changes to this program. In the end, I hope they work at it and reach a compromise. You’re not going to like everything they come up with but, you shouldn’t loose everything either. Something must be done to save Social Security and Medicare. Let’s start with some facts:
- The Social Security trust fund balance 12/31/2015 is $2.812 trillion
- Without reform, benefits could drop to 79% in 2034
- Social Security offers income you can’t outlive and offers you a good benefit.
- Monthly social security benefits of $2,000 per month could be worth +$650,000 lifetime income over a 20-year period and that could be even higher if you’re entitled to an annual cost-of-living (COLA) increase.
- Increase maximum earnings subject to Social Security tax
(currently $127,200 in 2017)
- Raise the normal retirement age
(currently 66 for individuals born between 1943 and 1954;
67 for those born in 1960 or later)
- Lower benefits for future retirees
(escalate benefits based on increases in consumer prices rather than wages)
- Reduce or eliminate the cost-of-living adjustments (COLAs) for all retirees
Democrats’ will focus on holding the line and even increasing benefits. Their plan would increase taxes on the wealthy and they will try to retain the centrality of Social Security’s role as a retirement system.
Republicans’ will focus on increasing the “full retirement age”, changing the COLA option and implementing an earnings test that applies to workers who are under the “full retirement age”.
Although the Social Security laws have recently changed, there are plenty of options still available to you that you should be aware of. The recent changes that were made only effected a small number of people and I would guess that many people didn’t know those options even existed. Realistically they closed up loopholes that probably shouldn’t have been there in the first place.
Know your options?
- When is the right time for you to collect you benefits
- Increase benefits by waiting to collect until you are age 65 or 70
- Spousal benefits
- Widow benefits
- Divorced benefits
- Children benefits
- Disabled benefits
Deciding on your social security benefits is a personal decision you shouldn’t take lightly. You should take into account your life style, the rules and your individual situation in order to make an informed and financially rewarding decision.
Social Security is too important to guess. Contact me if you would like to review your option. I will help you maximize your retirement income.