Showing posts with label 2013 social security. Show all posts
Showing posts with label 2013 social security. Show all posts

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 or  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 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

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

Sunday, October 28, 2012

Social Security Changes in 2013

Moderately good news was announced recently for retirees who are already receiving their Social Security benefits.  Your Social Security benefits are expected to increase by about 1.7% beginning in January, 2013.  If you are working and receiving Social Security benefits at the same time, the size of your check should increase even more than this because of the increased premiums you have been paying into the system during the past year.

The 1.7% increase is not as much as the 3.6% cost of living adjustment that was received in 2012.  However, since Social Security recipients did not receive any cost of living increase in either 2010 or 2011, it is helpful to be getting any increase at all this coming year.

There are other changes to Social Security that we can expect in 2013 that will affect both those who are working and paying into the system, as well as those who are already retired.

Other Social Security Changes in 2013

Unless the government takes steps to change it, the temporary payroll tax cut will expire at the end of this year, meaning that workers will once again return to paying 6.2 % of their income for Social Security, rather than the 4.2 percent that we have been paying for the past couple of years.  For many workers, this will mean a substantial decrease in the amount of their take-home pay.

Another change will affect people who are retired and collecting Social Security benefits but who are younger than their full retirement age (approximately about age 66).  If they are still working and collecting their reduced Social Security benefits at the same time, they will be able to earn $480 more next year before their Social Security benefits are reduced.  In other words, they can earn $15,120 rather than the current amount of $14,640 before their benefits are reduced.  Once retirees reach full retirement age, they can work, earn as much money as they want, and receive their full benefits without a penalty.

Another change that will benefit some retirees is that the maximum possible monthly benefit for someone who waits until their full retirement age to collect their Social Security benefits will increase to $2,533 a month.

Finally, everyone needs to be aware that, as of March 1, 2013, the Social Security Administration will no longer mail out paper checks.  Instead, beneficiaries can choose to either have their payments deposited directly into a bank account, or their funds will be loaded onto a Direct Express Debit MasterCard.  Doing away with paper checks will save the government money and provide a safer way for people to receive their benefits.

You may also be interested in reading:

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Photo of old Social Security card is courtesy of