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Social Security Benefit to Increase 2.8 Percent in 2019

Social Security benefits will increase 2.8 percent in 2019, the largest cost-of-living adjustment (COLA) in seven years.

The COLA, announced Thursday, Oct. 11, will increase the average Social Security retirement benefit by $39 a month or roughly $468 a year. The average single retired Social Security recipient is expected to receive $1,422 in December 2018 before increasing to $1,461 a month later. The COLA affects household budgets for about 1 in 5 Americans, including Social Security beneficiaries, disabled veterans and federal retirees.

AARP Chief Executive Officer Jo Ann Jenkins said, “The 2.8 percent COLA announced today brings needed income security to those Social Security beneficiaries and their families who depend on their earned, modest benefits. The COLA is particularly important for the tens of millions of families who depend on Social Security for all or most of their income, many of whom may have lost ground during the Great Recession. Unfortunately, the cost of living increase may not adequately cover their expenses that rise faster than inflation including health, prescription drug, utility and housing costs.”

On Friday, Oct. 12, the government announced a slight rise in monthly premium costs for Medicare Part B will go up in 2019. This increase could affect actual individual benefits because the premium is deducted from Social Security payments. Part B Medicare covers physician and diagnostic services, outpatient hospital services, certain home health services and durable medical equipment.

Those 65 and older could see their Social Security COLA swallowed up by health care costs, including the Medicare monthly premium increase, said Nancy Altman, president of Social Security Works, a nonprofit advocacy group. The Medicare monthly premium could be announced as early as next week. Medicare open enrollment begins Monday and ends Dec. 7.

Social Security is financed by a tax on workers’ wages. Next year, the maximum amount of earnings subject to the Social Security tax will increase from $128,400 to $132,900.

For answers to Social Security questions, including when to claim, AARP has launched the Social Security Resource Center, a one-stop shop for consumer information.

AARP Journal

10 Mostly Unknown But Important Facts About Social Security

1. When you reach full retirement age, your earnings no longer reduce your benefits, no matter how much you earn.

2. Children can get benefits, too.

Your unmarried children under age 18 — or 19 if still in high school — can receive benefits based on your work record if you're collecting Social Security retirement or disability benefits. Grandchildren also are eligible for benefits on a grandparent's record if they are dependents and receive no financial support from a parent.

3. In some cases, so do parents.

Moms and dads who rely on an adult child for at least half of their financial support can receive survivor benefits if that child dies.

4. You've got time to fix errors.

Mistakes in your earnings record could lead to reduced future benefits. Typically, you have three years, three months and 15 days after the year in which you earned the wages to fix mistakes. Social Security makes exceptions if, say, you have documentation of earnings or the error is obvious.

5. Chances of owing taxes are increasing.

Up to 85 percent of your benefits could be taxed, depending on your income. Because these income limits haven't changed for decades despite rising wages, the chances you'll owe taxes on benefits also have increased. Less than 10 percent of beneficiaries paid federal income tax on their benefits in 1984, the first year benefits were taxed. Now about 40 percent do, and, under current law, that's expected to climb to more than half in three decades.

6. You can change your mind.

Regret taking early — and reduced — benefits at 62? No problem. You have 12 months after starting benefits to withdraw your application — provided you repay all the money received so far. Miss the deadline? Don't worry, you get another chance for a do-over. Continue receiving benefits until your full retirement age, then suspend benefits without having to repay those you already received. Benefits will grow 8 percent annually until age 70, when you can restart benefits to get the maximum payout.

7. Most creditors can't touch your SS benefits

Your benefits are protected from private creditors. But Uncle Sam can garnish monthly benefits to repay debts such as back alimony, child support, restitution, federal taxes and federal student loans. Be aware, if your Social Security benefits are deposited in an account with other money, the bank must protect two months' worth of benefits from creditors. The bank can freeze the rest of the money, leaving it up to a court to decide whether creditors get the cash.

8. Newlyweds may not qualify For survivor benefits

You generally must be married for at least nine months to qualify for survivor benefits if your spouse dies. Among the exceptions: The spouse died in an accident or in the line of duty while in a uniformed service.

9. You can get a new Social Security number

Under very limited circumstances — if, say, you're a victim of domestic violence or identity theft — you may be able to get a new Social Security number.

10. Your ID is unique to you.

Once a Social Security number is used, it's never assigned again — even if the original owner died. Social Security, which has issued more than 453 million so far, says it has enough numbers to last several more generations without changes to the system.

Source: www.AARP.com

 

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