Sunday, December 9, 2012

Financial Facts affecting Baby Boomers in 2013


Whether you are already retired, or hope to retire in the coming decade, you need to be aware of some of the upcoming financial facts that may affect you.  Each year as the calendar rolls over, government agencies, commercial banks and private businesses make financial changes that often affect retirees and those close to retirement.  Listed below are some of the changes that have been announced for 2013.

Medicare, Social Security and Federal Retirement in 2013

Social Security benefits will increase by 1.7 percent for those who are currently collecting benefits.  Since the average benefit is about $1,240 a month, this amounts to approximately $21 a month.  Federal government pensions, including for military retirees and disabled veterans, will also increase by the same percentage.

Offsetting the small Social Security increase is the fact that Medicare premiums are going up $5 a month from $99.90 to $104.90.  Depending on the final negotiations currently going on in Washington, Medicare beneficiaries who have an income of over $85,000 as individuals or over $170,000 for couples could see their monthly premiums increase by $42.00 to $230.80 a month.  Deductibles are also increasing for Medicare recipients.  For example, the annual hospitalization deductible will increase by $28 to $1,184 and the annual deductible for outpatient care will go up by $7.00 to $147.00.

Beginning in 2013, the discount that Medicare Part D beneficiaries will get on brand-name drugs will increase from 50% to 52.5% and the discount on generic drugs will increase from 14% to 21%.

Also beginning next year, taxpayers under the age of 65 will see the threshold for itemizing their unreimbursed medical deductions rise from 7.5% to 10% of their adjusted gross income.  Those over age 65 will not be affected until 2017, when everyone will see the threshold rise to 10%.

Making Financial Gifts to Loved Ones

If you are planning to give money to your children or grandchildren, you should know that you can give a $13,000 gift that is tax-free to as many people as you want.  A married couple can give $26,000.

Maximizing Your Retirement Income

Retirement advisors continue to recommend that you postpone collecting your Social Security benefits as long as possible, up until age 70.  The longer you wait to collect, the greater your income will be and the less you will need to depend on supplemental income.

Working part-time after retirement is a viable way to increase your retirement income and not only helps people financially, but is also an effective way for retirees to keep their minds sharp, their skills current, and makes it easier for them to maintain their social connections.  If you have not yet stopped working, you may want to talk to your current employer about cutting back on your hours rather than retiring completely.  If you have stopped working, you may want to talk to former employers, friends and local businesses about opportunities for part-time employment.

Bank interest rates are currently extremely low.  Most banks pay only 0.01 to 0.08 percent, which is far below the rate of inflation.  You can slightly increase your retirement income by getting around 1 percent from online banks such as Ally, Barclays, Ever-Bank and CIT.  You can see their current rates at MoneyRates.com or Bankrate.com.  Before you open an account with an online bank, however, you will want to make sure the bank you are considering is FDIC insured.  Go to "Bank Find" at http://fdic.gov/deposit to check.

You may also be interested in reading these blog posts:

Choosing an Executor of Your Will
Do You Need a Million Dollars to Retire?
Cheap Places to Retire
Planning for Long Term Medical Care

You are reading from:  http://baby-boomer-retirement.blogspot.com

Photo of money courtesy of www.morguefile.com

Financial facts as reported in Yahoo! Finance and the AARP Bulletin during December, 2012.

3 comments:

  1. This is great information. Between what you've pointed out and tax law changes, boomers need to watch and plan their finances carefully for 2013.

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  2. Glad to stumble upon your blog. Those figures you have stated are really helpful. I also happen to have read the article "9 Facts About Retirement" and it cited some interesting facts about retirement. Take note that the 65-and-older age group is expected to become larger and have more influence in the future.

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