Recipients get a raise in 2015. Ideas for reform are numerous.
provided by Nicole Albrecht
Social Security benefits are increasing 1.7% in 2015. This marks the fourth straight yearly cost-of-living adjustment, following a 1.5% COLA for 2014.1
Next year, the average monthly Social Security payment for a single retiree increases by $22 to $1,328. The average retired couple will get $2,176 per month in 2015 (a $36 monthly increase). A single retiree claiming benefits at the full retirement age of 66 in 2015 could get a maximum monthly Social Security payment of $2,663.1,2
Medicare Part B premiums won’t rise in 2015. They will remain at $104.90 per month for most people. If you’re among the minority of Medicare recipients who buy Part A coverage, you’ll be happy to know that monthly Part A premiums are $19 cheaper in 2015 – they are decreasing to $407. The annual Part B deductible will remain at $147; the Part A deductible will rise from $1,216 to $1,260.3
Relatively few Social Security recipients have annual modified adjusted gross incomes in excess of $85,000 (single filers) or $170,000 (joint filers). Unfortunately, if your 2013 MAGI exceeded those applicable thresholds, you will pay total Part B monthly premiums of anywhere from $146.90-$335.70 per month during 2015.3
Social Security’s retirement earnings test amounts have also risen. If you receive Social Security benefits and you will be younger than full retirement age at the end of 2015 (i.e., age 62-65), $1 of your benefits will be withheld for every $2 that you earn above $15,720 (the 2014 limit was $15,480). That $15,720 works out to $1,310 a month.2
If you receive Social Security benefits and reach full retirement age during 2015 (age 66), then $1 of your benefits will be withheld for every $3 that you earn above $41,880. (That breaks down to $3,490 a month.) Upon turning 66, your Social Security benefits are never reduced because of earned income levels.2
As always, part of your Social Security benefits may be taxed.This may happen if you exceed the program’s “combined income” threshold. (Combined income = adjusted gross income + non-taxable interest + 50% of Social Security benefits.)4
If you are a single filer with a combined income between $25,000-34,000, you may have to pay federal income tax on up to 50% of your Social Security benefits in 2015. That also goes for joint filers with combined incomes of $32,000-44,000.4
If you are a single filer with a combined income of more than $34,000, you may have to pay federal income tax on up to 85% of your 2013 Social Security benefits. Likewise for joint filers whose combined incomes top $44,000. 4
Those married and filing separately will “probably” have their benefits taxed in 2015, according to the program’s website.4
How much retirement income do you have these days? With Social Security’s future still surrounded by questions, you may be thinking about where your retirement income will come from in the years ahead. A chat with the financial professional you know and trust may lead to some ideas.
Nicole Albrecht may be reached at 951-719-1515 or Nicole@thinkfas.com www.thinkfas.com
Citations.
1 – tinyurl.com/n9haels [10/27/14]
2 – forbes.com/sites/janetnovack/2014/10/22/social-security-benefits-rising-1-7-for-2015-top-tax-up-just-1-3/ [10/22/14]
3 – medicare.gov/your-medicare-costs/costs-at-a-glance/costs-at-glance.html [11/4/14]
4 – ssa.gov/planners/taxes.htm [11/4/14]
