Social Security benefits have provided essential care for our retired, elderly and disabled for nearly a century. However, with the changing economic tides, the parameters of the benefits also shift.
Investment and finance writer Dan Caplinger provided a helpful article via Fool.com detailing the most influential of these changes that include:
- The annual Social Security COLA (Cost-of-Living Adjustment) boosted benefits 1.7%. Average retired worker benefits are now $1,328 monthly while disabled workers receive $1,165. Monthly benefits for receiving survivors and widows of two children increased to $2,680.
- Due to a lack of inflation in 2015, Social Security recipients will not receive a COLA increase in 2016. Legislators are considering a one-time payment as an alternative boost to benefits, but this currently remains a mere proposition.
- In 2015, the maximum Social Security benefit hit an all-time peak of $2,663. In 2016, this maximum benefit will experience a slight decline to $2,639 due to the lack of a 2016 COLA and an increase in the national wage index that will effect the determination of benefit level.
- The file and suspend strategy will be unavailable as of May 2016. This eliminates the option of spouses to utilize a joint file for benefit.
- For those who turn 62 after early 2016, the restricted application strategy will be unavailable. This will prevent spouses from claiming spousal benefits while awaiting personal delayed retirement credits.
Closing the article, Caplinger also mentions a Social Security loophole that could lead to a significant increase in benefit:
The $15,978 Social Security bonus most retirees completely overlook
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These adjustments may seem minor, but they can entail major implications for recipients of Social Security benefits. It is important that recipients stay informed on these changes in order to be prepared for a potential impact on their finances.
Photo by 401(K) 2012 via Flickr CC License
