E.F. Heagen & Associates

(949) 487-6711

Social Security: What’s Changing in 2016?

Whether you will soon be applying for Social Security, or are already receiving benefits, here’s what you need to know about what’s changing (and not changing) in 2016.

What’s Not Changing

No Cost-of-Living Increase: Because inflation was unchanged from the third quarter 2014 to the third quarter 2015, there will be no increase in benefit payments to current recipients in 2016.¹

Tax Cap Remains Unchanged: For workers, the cap on wages subject to Social Security withholding stays at $118,500.²

Earnings Limit: The amount that any Social Security recipient can receive in compensation without a reduction in his or her Social Security benefits remains unchanged from 2015 at $15,720 (under the full retirement age) and $41,880 (the year an individual reaches full retirement age).³

Medicare Part B Premium: Since the law prohibits Medicare premiums from rising faster than Social Security benefits, most retirees will see no increase in Part B premium costs. However, first-time enrollees in 2016 and high-income Medicare beneficiaries may pay a higher premium.

What’s Changing

Better Customer Service: Look for online services to expand, self-service kiosks at field offices to increase and reduced wait-times for a hearing decision.

Benefit Maximization Strategies: The file-and-suspend and restricted application strategies that worked to maximize the income benefits from Social Security have been eliminated, though the law does provide some grandfather protections.

Elimination of Revoking Suspended Benefits: Individuals who filed for benefits and then suspended them to gain a future, higher payout previously had the flexibility to “un-suspend” benefits in the event of a life-threatening illness or change in financial circumstances and receive a retroactive lump sum payment. This flexibility will no longer exist.

  1. Social Security Administration, 2016. The Social Security Act specifies that cost of living are based on increases in the Consumer Price Index for Urban Wage Earners and Clerical Workers.
  2. “Fact Sheet: 2016 Social Security Changes,” Social Security Administration
  3. “Fact Sheet: 2016 Social Security Changes,” Social Security Administration

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG, LLC, is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2019 FMG Suite.

Share |
 

Related Content

RE: Retirement

RE: Retirement

How does your ideal retirement differ from reality, and what can we do to better align the two?

Is a SEP-IRA Right for Your Business?

Is a SEP-IRA Right for Your Business?

For some, the idea of establishing a retirement strategy evokes worries about complicated reporting and administration.

Investment Strategies for Retirement

Investment Strategies for Retirement

Investment tools and strategies that can enable you to pursue your retirement goals.

 

Have A Question About This Topic?







Thank you! Oops!

9 Facts About Retirement

Regardless of how you approach retirement, there are some things about it that might surprise you.

Catch-Up Contributions

Workers 50+ may make contributions to their qualified retirement plans above the limits imposed on younger workers.

Caring for Aging Parents

As our nation ages, many Americans are turning their attention to caring for aging parents.

View all articles

A Look at Systematic Withdrawals

This calculator may help you estimate how long funds may last given regular withdrawals.

Annuity Comparison

This calculator compares a hypothetical fixed annuity with an account where the interest is taxed each year.

Inflation & Retirement

Estimate how much income may be needed at retirement to maintain your standard of living.

View all calculators

Retirement Plan Distributions

There are a number of ways to withdraw money from a qualified retirement plan.

Investment Strategies for Retirement

Investment tools and strategies that can enable you to pursue your retirement goals.

An Inside Look at Retirement Living

A number of questions and concerns need to be addressed to help you better prepare for retirement living.

View all presentations

The Power of Tax-Deferred Growth

Why are 401(k) plans, annuities, and IRAs so popular?

Retirement Redefined

Around the country, attitudes about retirement are shifting.

Tuning Your Social Security Benefit

When should you take your Social Security benefit?

View all videos