The Secure Act has dominated recent headlines; however, the Social Security Administration has released the changes for 2020 and they are just as important for those nearing or in retirement. Below is a quick overview of what to expect for this year.
- You are receiving a raise! Social Security checks are increasing by 1.6% this year. Sure there have been larger increases, but every extra dollar helps offset inflation.
- Unfortunately, the increase will have a modest impact on your lifestyle due to the 6.7% increase in the Medicare Part B premium. At first glance, you might assume a hold-harmless situation exists. However, the larger Medicare increase is applied to a smaller amount than the social security increase; therefore, the hold-harmless situation isn’t likely to apply to many people.
- The cost-of-living adjustment raised the earnings threshold to $18,240 for those filing prior to full retirement age and $48,600 for those applying the year of full retirement.
- The new taxable wage base is $137,700, up from $132,900.
- Finally, the maximum social security benefit for a person retiring in 2020 is $3,011, up from $2,861.
Hope you find the above helpful as you plan for retirement.