current social security news
Social Security Changes for 2020 Social Security recipients will get 1.6 percent bigger checks in 2020. Each year about this time, the Social Security Administration announces the annual cost-of-living adjustment (COLA). While this is good news for recipients, wage earners are going to pay for this increase.
The maximum amount of earnings subject to Social Security tax will increase by $4,800 to $137,700 in 2020. Workers pay 6.2 percent of their earnings into the Social Security system until their income exceeds the taxable maximum. They also pay an additional 1.45 percent of their wages for Medicare for which there is no cap.
Lastly, individuals who will turn 62 in 2020 will need to wait even longer to claim their full retirement benefit. The full retirement age for those born in 1958 is 66 and eight months.
You can find the Fact Sheet of 2020 Social Security changes here: https://www.ssa.gov/news/press/factsheets/colafacts2020.pdf
Social Security Disability Benefits vs. Retirement Benefits at Age 62 Although workers are eligible to collect Social Security retirement benefits as early as age 62 - assuming they have earned 40 credits of Social Security coverage during their lifetime - their retirement check would be 75 percent of their full benefit rate.
If that same 62 year-old worker is disabled and has worked and paid Social Security taxes in five out of the last ten years, they should apply for both retirement and disability benefits at age 62.
Unlike retirement benefits being reduced at age 62, if the disability claim is approved, they would be paid their full retirement age amount, or 100 percent.
If the worker has not worked in five out of the last ten years, then they would not be eligible for any Social Security disability benefits and would only get a reduced retirement check.
But in that case, if their retirement check is less than about $750 per month, they may possibly be due Supplemental Security Income (SSI) disability, which is like a welfare program. Set up a meeting at your local Social Security office to make sure you are receiving all the benefits you are entitled to.
Social Security When You Are Self-Employed Most people who pay into Social Security work for an employer. Their employer deducts Social Security taxes from their paycheck, matches that contribution, sends taxes to the Internal Revenue Service (IRS), and reports wages to Social Security. However, self-employed people must report their earnings and pay their Social Security taxes directly to the IRS. These taxes will help determine your eligibility for benefits later.
You're self-employed if you operate a trade, business, or profession, either by yourself or as a partner. You report your earnings for Social Security purposes when you file your federal income tax return. If your net earnings are $400 or more in a year, you must report your earnings on Schedule SE, in addition to the other tax forms you must file.
Net earnings for Social Security are your gross earnings from your trade or business, minus your allowable business deductions and depreciation. Some income doesn't count for Social Security and shouldn't be included in figuring your net earnings.
Nov 23, 2016 - Why Social Security is Crucial to Women, by Mary Beth Franklin
Articles and White Papers
1. Women and Social Security Income Planning The Emerging Opportunity For Niche Financial Advisory Stewardship; Life & Health Advisor Magazine; It is more important than ever for women to obtain good financial planning advice as their wealth and financial power increases. Additionally, just as important for women reaching retirement age is the consequence of a smart Social Security election decision on her lifetime income. This dual financial service need has created a win-win opportunity for advisors and women.
2. Social Security Planning: An Essential Element in Attracting Female Clients; BrightTALK Webinar, Thought Leadership for Financial Advisors Channel; It is more important than ever for women to obtain good financial planning advice as their wealth and financial power increases. Additionally, just as important for women reaching retirement age is the consequence of a smart Social Security election decision on her lifetime income. This dual financial service need has created a win-win opportunity for advisors and women.
3. Social Security Insecurity: How Advisors Can Help; Life Health Pro Magazine; “They (Social Security Administration) can give you the general information, and there’s a tremendous amount of it on their website,” Shedden says. “But they can’t deal with these hundreds and hundreds of different math equations that focus on one particular couple or a person. Each one is unique. There are different ages; there are different primary insurance amounts; they have different life expectancies; there’s a different relationship between a couple’s ages and their primary insurance and all that is what is just unique to each case.”
4. Understanding the SSA ‘Suspend & Restart’ Rule; ‘Super Size’ your client’s Social Security Income; Life & Health Advisor Magazine; Understanding how the Social Security Suspend and Restart Rule works can open doors for advisors to a large new pool of prospects while significantly increasing and adding value to their existing client base. Many – actually over 50% – of retirees claim their Social Security at early age 62, as soon as they are able to. Many of these early claimants may later regret the decision and wish they could make a different choice.
5. Stripped Down Social Security; REP Magazine; An interview by Lauren Barack on the value of online sites and apps that help make Social Security calculations simpler.
6. 3 Social Security Income Tax Myths...and how advisors can dispel them for their clients; Life & Health Advisor Magazine; More and more retirees are having their net “take-home” retirement income eroded due to taxation of their Social Security income benefit. Many retirees are unaware that up to 85% of Social Security income can be taxed. Furthermore, they may not even be aware that they can have significant control over reducing, or even all together eliminating, this taxation of their retirement income stream. However, with some advance planning, a considerable segment of retirees receiving their Social Security income may be able to reduce, or even eliminate, the taxation of their Social Security benefit.