Given that Social Security is so critical to retirement, it's important to understand it well and to keep up with proposed changes to it.
(PRWEB) December 30, 2016
Some significant changes to Social Security benefits that may affect retirement income for Baby Boomers and retirees in 2017 are the subject of a new blog from San Diego retirement planner Jeremy Keating titled “Changes to Social Security Benefits to Look For in 2017.”
In the blog, Keating focuses on six notable changes published in the newly released Social Security Fact Sheet, expected to affect most beneficiaries, including a slight cost-of-living-adjustment (COLA) hike and a cap increase on the amount of workers’ earnings that will be subject to Social Security taxes in 2017. Changes include:
- A 0.3 percent benefits increase, which averages a $5 monthly increase in beneficiary payments, a result of the cost-of-living-adjustment (COLA) increase as measured by the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). According to Keating’s blog, the average monthly Social Security payment for retired workers in 2017 is anticipated to be $1,360. Retired couples are expected to receive an average of $2,260 per month in 2017, up from $2,254 in 2016.
- The Social Security tax cap will increase to $127,200 in 2017, up from $118,500 in 2016—an an increase of $8,700 or 7 percent. Individuals whose income exceeds that cap will pay no Social Security tax on earnings above that limit. The Social Security tax rate will remain unchanged at 6.2 percent.
- Increased earnings limits for retirees who work and collect Social Security, who may be able to have part of their benefit temporarily withheld if they earn too much. Earnings limits for individuals who will turn 66 in 2017 will increase by $3,000 to $44,880, and the payment reduction will drop to $1 withheld for every $3 earned in excess of the earnings limit. For people age 65 and younger, the Social Security earnings limit will increase from $15,720 in 2016 to $16,920 in 2017. Beneficiaries who earn more than this amount will have $1 in benefits withheld for every $2 in earned income above the limit.
- The maximum possible payout for someone retiring at his or her full retirement age of 66 in 2017 will increase by $48 to $2,687 in 2017. However, individuals who postpone starting payments until after their full retirement age may be eligible for a higher monthly payment.
- Individuals who turned 62 on January 2, 2016 or later are no longer able to claim both a spousal payment and an individual payment at different times. Instead, married retirees will now automatically receive the higher of the two benefit options. However, dual-earner married couples age 66 or older will still have the option to delay claiming benefits and collect spousal payments worth half of the higher earner's benefit amount. This way, they will be able to switch to payments based on their own earnings later, which will reflect a higher payout as a result of delayed claiming.
- While beneficiaries between the ages of 66 and 70 can voluntarily suspend their payments to earn delayed retirement credits that will produce a higher monthly payment once they resume their benefits, their dependents will no longer be able to receive benefits. A new rule applies to benefit suspensions requested on or after April 30, 2016 that halts payments to family members, based on the beneficiary’s work record during the period of the benefit suspension. The exception to this rule applies to divorced spouses, who can continue receiving a divorced spousal benefit if the ex-spouse suspends his or her retirement benefit.
Keating’s blog also offers some background on the Social Security system from the Congressional Budget Office leading to current changes about to take place in 2017, and future proposed changes that can be made to maintain the program for years to come.
“Given that Social Security is so critical to retirement, it's important to understand it well and to keep up with proposed changes to it,” Keating says. “Familiarizing yourself with the 2017 rule changes is important to start planning a Social Security strategy for the new year.”
To learn more, visit the Capital Income Advisors website, email jkeating(at)capitalincomeadvisors(dot)com, or call (800) 875-1986.
About Capital Income Advisors:
The primary focus at Capital Income Advisors is retirement planning. Jeremy Keating and the CIA team of advisors treat their clients as they would treat members of their own family. CIA strives to help create sound retirement income strategies for men and women in or nearing retirement, thereby instilling confidence that their retirement income will last as long as they do.
Capital Income Advisors serve all of Northern and Southern California, all across Texas including, Houston, Dallas, Austin, San Antonio, Midland, and the New York Tri State area. CIA offers retirement income strategies, wealth accumulation, asset protection, annuities, life insurance, tax minimization strategies, long-term care, IRA and 401(k) rollovers.
Securities offered through Securities America, Inc., Member FINRA/SIPC. Advisory services offered through Securities America Advisors, Inc. and Arbor Point Advisors LLC. Capital Income Advisors, Securities America, Inc., and Arbor Point Advisors LLC are separate entities. Securities America and its representatives do not provide tax or legal advice; therefore, it is important to coordinate with your tax or legal advisor regarding your specific situation.