#415 Changes to Social Security and Medicare

Social Security

We wanted to give an update on some news dealing with Social Security. Last Thursday the Social Security Administration announced that for 2020 there will be a 1.6% cost of living increase to Social Security benefits. This is good news because it’s obviously a positive adjustment. It’s not as high of an adjustment as we’ve had in the recent past. In 2019 there was a 2.8% adjustment up from the previous year and the year before that there was a 2% adjustment. So, while it’s not as favorable as it has been in the past, it’s not zero. In 2010, 2011 and 2016 there was no adjustment up and the average over the past decade has been a 1.4% percent increase. So, the 1.6% coming up in 2020 is higher than the average, which is a good thing.

Medicare Part B

The next potential adjustment that could affect a lot of people is going to be the Medicare Part B premium increase. They have estimated a current year increase going forward up to $144 from the current cost of $135. That’s a little bit of an increase. That is not finalized and is just an estimate. These adjustments don’t just affect the people taking social security benefits. It also affects working Americans. As you probably know part of your income is taxed to provide for Social Security benefits for you and others. So, recently the amount of payroll earning subject to Social Security taxes is $132,900. With these cost of living changes that number is going to go up to $137,700. So, we just wanted to give you some updates on recent changes to the Social Security Administration with the benefits going forward. Social Security can be a very complicated topic when discussing when to claim your benefits and how you and your spouse will coordinate a claiming strategy. So, if you have a question on those or anything related to Social Security or your financial plan in general, please don’t hesitate to reach out and we can help you solve those issues.

 

Jay McGowan, CFP®, CPA, PFS
Senior Vice President
Director of Financial Planning
Email Jay McGowan Here

 

Fi Plan Partners is an independent investment firm in Birmingham, AL, serving clients across the nation through financial planning, wealth management and business consulting. Fi Plan Partners creates strategies in the best interest of their clients using both fee based investing and transactional investing.

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