There are some changes coming to Social Security this year that will have an impact on retirees across the country. Residents of Lake Ashton, a Florida retirement community, will see some positives and negatives in the changes. Here are the changes to keep an eye out for.
Starting in January, Social Security payments will increase by 0.3 percent as part of a cost-of-living adjustment. The increase is estimated to result in an extra $5 a month for the typical Social Security beneficiary. The average monthly payment for retired workers will be $1,360, and retired couples can expect an average of $2,260 per month.
There will also be an increased earning limit. Those who work and collect Social Security at the same time will have part of their benefit temporarily withheld if they earn too much. People age 65 and younger will see their earnings limit increase to $16,920, and beneficiaries who earn more than that will have $1 in benefits withheld for every $2 of earned income over the limit. If you are turning 66 in 2017, the earnings limit increases to $44,880 and the payment reduction declines to $1 for every $3 earned over the limit. However, once you turn age 66 and work and receive benefits, your payments are no longer withheld and your payments will be increased to give you credit for any part of your benefit that was withheld in the past.
Higher earners will pay more taxes as the amount of earnings subject to Social Security tax increases to $127,200, up from $118,500 last year. This will impact up to 12 million people currently paying into the system.
The full retirement age (FRA) continues to rise. For those born between 1943 and 1954, the FRA is 66. Now, for those born in 1955, the FRA is 66 years and two months.This increase will continue, reaching 67 years for those born in 1960 or later.
In addition, dual-earner married couples will no longer be able to claim both a spousal payment and an individual payment at different times. Married retirees will now automatically receive the higher of the two benefit options without the option of claiming both types of payments at different times.
Fortunately, there is a rise in the maximum possible benefit. A worker retiring at full retirement age in 2017 will have a $48 increase from 2016, with a maximum benefit of $2,687 per month.
If you’re planning a move to a Florida retirement community like Lake Ashton, or already enjoy a rich retirement in such a welcoming community, it is important to understand any Social Security changes and how they can affect your retirement. Hopefully, it’s all smooth sailing for you!