5 Major Changes In Social Security For 2015

5 Major Changes In Social Security For 2015

Now that we’ve entered 2015, a few major changes have happened in Social Security, meaning your retirement plan may be affected, according to AARP. Consider how these alterations could affect your lifestyle.

  1. A bigger payout
    The Social Security Administration has decided to increase the payout for recipients by 1.7 percent, due to an adjustment in the annual cost of living, which occurs every year. Some years there are small changes, and other years there are large ones, Yahoo! Finance stated. The SSA examined the Consumer Price Index from the third quarter of 2013 and the third quarter of 2014. They found that the index increased, so they decided to increase the payout to match that rise. So what does that percentage equal in dollars? Each recipient will get about $22 more per check Yahoo! Finance stated. This means that the average cost of living for retirees will increase from $1,306 to $1,328. Retired couples are expected to get $36 more back each check.
  2. A greater benefit maximum
    People who retire at their full retirement age will get better benefits this year than they have in the past. A full retirement age is when a person is older than 65, which applies for anyone who was born after 1938, the SSA explained. If a person begins his or her full retirement at age 62, their benefits will decrease each year by 30 percent. However, the financial benefits are increasing for retirees this year. The maximum benefit amount will be $21 more than it was in 2014, going from $2,642 in 2014 to $2,663 in 2015, according to Yahoo! Finance.
  3. Greater Social Security taxes
    Though retirees may benefit from these changes, those in the working world won’t. Currently, employees in the U.S. give about 6.2 percent of their paycheck toward Social Security, until they earn an amount that’s higher than the tax cap. Yet the earnings that made people ineligible for being taxed are going up. In 2014, you needed to earn at least $117,000 annually to not be taxed. In 2015, you need to earn $118,500. Due to these changes, approximately 10 million of the 168 million people who pay Social Security taxes will be taxed a greater amount.
  4. Higher earning amounts
    People who have signed up for Social Security and are under the age of 66 can pulapproximately $15,720 in 2015. That is before every $1 of benefits will be taken for every $2 that is earned above the maximum. People who just turned 66 and signed up for Social Security can earn as much as $41,880 before every $1 of benefits will be withheld from every $3 earned over the limit. Yet once a person in retirement reaches the age of 66, he or she can earn as much as desired without penalty, and he or she will be given a return on their withheld benefits.
  5. You’ve got mail
    The SSA is also planning on giving actual mailings to people who have not signed up for Social Security yet, if they turned 25, 30, 35, 40, 45, 50, 55 or 60 in 2015. The mailing will be a statement telling people their total earnings, the amount of taxes they’ve paid and how much they can expect in benefits three months before their birthday. People who are past the age of 60 will receive a mailed statement annually if they have not signed up online. Previously, the administration had stopped sending mailings in 2011 to cut down on costs. This year, the SSA is predicting it will send out an estimated 48 million statements.