Social Security Benefit Changes

From the beginning of 2016 and going forward, Social Security beneficiaries will see several major changes to the program.  More changes are likely to follow in the coming years.  Whether you are already receiving your Social Security benefits or expect to receive them in the coming years, many of these changes will affect you.

The End of the File and Suspend Option

File and Suspend is an option that first became available in 2000.  Under this strategy, a married couple could plan for one of the individuals to initially receive a smaller check based on one-half the income of their spouse, while letting their own benefits continue to grow until age 70.  At age 70, they were able to choose whichever benefit was greater.  File and Suspend will no longer be an option.  There is no point in explaining the finer points of this tactic, because it ends in a few weeks.  It is unavailable to anyone who reaches age 62 in 2015 or beyond.  Many people who were planning to use this option when they reached their retirement age will be disappointed.

Deemed Filing is Now the Option Chosen by Most Married Couples

Moving forward, when a person files for benefits anytime between the ages of 62 and 70, it will be considered a deemed filing.  At that point, the beneficiary will choose between the larger of their spousal and personal retirement benefits.  Up until now, retirees could only use deemed filing up until their full retirement age, at which time they had to choose between collecting benefits on their own earnings or taking the spousal benefit.  Now retirees will have a few years longer to make that choice. 
Because some of the rules around this are new, retirees should do more research about the deemed filing option as they get close to retirement.  In addition, I cannot stress enough the importance of purchasing one of the excellent books about Social Security that are available using this Amazon.com link.  It is important to realize that many of them will not be updated with the newest information for a few months.  Ebooks will probably be updated the most quickly.

Fixing the Social Security Trust Fund Shortfall

The elimination of File and Suspend will cost some couples tens of thousands of dollars during their lifetime.  However, this change is the first step in making sure that the trust fund does not run out of money as quickly as has been projected and it will improve its long-term financial stability.

In the future, taxpayers should expect additional changes to protect the Social Security Fund.  Although no final decisions have been made, the changes will probably include small increases in payroll tax withholding and a slight rise in the full retirement age.

Benefits Will Be Lower Than Expected for the Highest Income New Retirees

Some high income retirees will be surprised to discover that they will receive about $24 less per month than they expected.  According to a Social Security Administration statement, "A decrease in full maximum benefits occurs when there is no cost-of-living adjustment, but there is an increase in the national average wage index."  In 2016, the maximum amount that a 66 year-old worker will receive per month will be $2,639, reduced from $2,663 in 2015.

Online Changes

In an effort to save money in administrative costs, the Social Security Administration will offer more online services than they have in the past.  For example, beneficiaries will now be able to order a new Medicare card online, rather than being required to visit a Social Security office.

Longer Office Hours

Another change to expect at your local Social Security office is longer office hours.  Most offices will be open one hour longer each day, although they will still close at noon on Wednesdays to allow employees to reduce backlogs.  If you are planning to visit your local office, it is advised that you call and confirm the office hours before you show up.

If you want to learn more about your Social Security benefits, financial planning, where to retire, health issues and more, use the tabs or pull down menus at the top of the page to find links to hundreds of additional articles.

You are reading from the blog:  http://www.baby-boomer-retirement.com

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Sources:

http://finance.yahoo.com/news/budget-deal-cutting-social-security-040000781.html?soc_src=mail&soc_trk=ma#

http://finance.yahoo.com/news/7-ways-social-security-change-153228828.html

Aging in America - Fascinating Facts

The Population Reference Bureau, which searches for population trends around the world for a variety of populations including the aged, children, and minorities, has a very interesting brochure which can be downloaded from their website.  It contains fascinating statistics about how and where the population of the United States is aging.  It is called Aging in America and you will find a link to it at the end of this article.

The twenty page brochure contains charts, statistics and far more information than I could possibly fit into a blog post.  However, I thought I would summarize some of the more fascinating facts here.

America's Aging Population

*  Baby Boomers are the people who were born between 1946 and 1964.  This means that the Baby Boomer generation began turning 65 in 2011 and is continuing to turn 65 at a rate of about 10,000 to 11,000 a DAY!

*  There are currently a little over 40 million Americans ages 65 and older; by 2050, that number will more than double to 89 million Americans.  By that time, about one-fifth of the U.S. population will be age 65 and older.

*   Japan, Italy, Germany and the United Kingdom are aging at even a faster pace than the population of the United States.  Aging is also accelerating in other countries, including Russia, China, Brazil, India and Mexico, and is becoming a global phenomena.  As life expectancy grows longer and birth rates drop, the world's population will continue to age.

*  The racial make-up of this country is also changing.  In California, New Mexico and Hawaii, non-Hispanic whites now make up less than half the population of those states.  Typical Caucasian, non-Hispanic whites will be a minority nationally by 2041.  In the near future, there will no longer be a single racial majority nationwide.  The labor force at that time be made up primarily of Hispanic, Asian and multi-racial workers, while the aging Baby Boomer population consists primarily of non-Hispanic whites.  Will this knowledge encourage the non-Hispanic whites in positions of power in our government to adopt policies that provide greater access to education and jobs for those minorities who will soon be running this country?  After all, in the future those Hispanic, Asian and multi-racial workers will be the ones to support and take care of the aging Baby Boomers.

*  The aging population is not spread out evenly across the country, but is heavier in certain pockets.  For example, in the Midwest and Northeast, the population is aging faster because many of the young people are moving away and older residents are aging in place, remaining in their familiar communities. 

*  On the other hand, when people do choose to relocate, they are moving in large numbers to certain retirement destinations, bringing a higher than average number of senior citizens to those regions.  Among the retirement destinations that are heavily impacted are Florida, Arizona and Nevada.  In addition, many retirees are choosing to move to or remain in small towns and rural areas, which will increase the demand in those areas for senior housing, public transportation, health care and retail businesses.

*  According to the Index for the Well Being of Older Populations, the best countries for those 65 and older are Denmark, Netherlands, Switzerland and the United States.  Our goal should be to make sure we remain near the top of the list in the coming decades.

There is a great deal of additional fascinating demographic information about our aging population in this brochure.  It is well worth reading ... as are other brochures that are available from the Population Reference Bureau.

To read the full brochure for yourself, you can download it at:  America's Aging Population from the Population Reference Bureau at PRB.org - Volume 66, No. 1.

If you are looking for additional information about aging and retirement, use the tabs or pull down menu at the top of the page to find links to hundreds of articles about where to retire in the United States and overseas, health issues, financial planning and more.

You are reading from the blog:  http://www.baby-boomer-retirement.com

Photo credit:  Morguefile.com

Money Magazine Best Places to Retire

Forbes, Money, AARP and U.S. News periodically come out with their own lists of the best places to retire in the United States.  The reason there are so many different lists is because they each use different criteria.  However, I believe it is helpful to my readers to be informed about these various lists so they know if the communities they are considering are a good possibility.

This month I am featuring the 2015 Money Magazine list of the Best Places to Retire.  First, however, you will want to know the criteria they used.

Money Magazine Criteria for the Best Places to Retire

What were the types of things that Money Magazine considered when they compiled their list?  First, they considered the four top towns in five different categories.

The categories were: The places where retirees could pursue an active lifestyle in ...

The outdoors
The arts
Waterfront living
Continuing Education
Golf

How did they choose the best communities for each of those interests?

Here are the issues they considered:

Communities with at least 10,000 residents
A variety of services and populations
No more than 95% of residents of one race
At least 20% of residents over the age of 50
Median home prices below the national average
Low taxes
Within 30 miles of a major hospital
Accessible to culture, recreation and green space

Finally, they also interviewed both new and longtime residents to determine if there is a sense of community spirit and vibrancy ... issues that can be hard to measure.

Once they had taken all these factors into consideration, they came up with their lists.  Below, I have listed their top picks, along with the median home price.

Where to Enjoy the Great Outdoors after Retirement

St. George, Utah - $195,000
Vail, Arizona - $199,500
Fayetteville, Arkansas - $166,000
Richland, Washington - $205,450

Where to Enjoy the Arts after Retirement

Boise, Idaho - $184,500
Santa Fe, New Mexico - $248,000
Chattanooga, Tennessee - $128,650
Dover, Delaware - $136,000

Best Retirement Areas for Golf Lovers

Prattville, Alabama - $150,415
Clermont, Florida - $190,000
Stillwater, Oklahoma - $136,000
Fishers, Indiana - $228,000

Best College Towns for Retirees

Northfield, Minnesota - $172,500
Asheville, N.C. - $200,000
Lexington, Kentucky - $142,000
Athens, Georgia - $128,000

Best Retirement Towns for Waterfront Living

Bluffton, South Carolina - $230,000
Traverse City, Michigan - $161,250
Cape Coral, Florida - $144,900
Loveland, Colorado - $225,000

Diversity on the Money Magazine List

As you will see, this list includes nineteen different states from most of the regions in the United States.  I was disappointed to note that it did not include any communities in California, Oregon, or in the Northeast above Delaware.  Those regions all include populated areas where many people would like to retire.  With that thought in mind, I would like to mention that this blog also includes articles on other popular retirement areas, including California coastal towns, and the retirement communities around the charming town of Lancaster, Pennsylvania. 

In addition, if you already have an that interests you, I assure you that there are retirement communities in nearly every region of the United States.

If you are looking for more ideas about where to retire, use the tabs or pull down menu at the top of this article to find links to hundreds of additional articles about where to retire in the United States or overseas, health issues, financial considerations, and other retirement concerns.

Source:

"Best Places to Retire 2015," Money Magazine, July 2015.

Other articles that may interest you:

http://onboardinformatics.com/blog/money-magazine-releases-best-places-retire-2014/

http://time.com/money/3914804/best-places-to-retire-2015/

http://money.usnews.com/money/retirement/best-places-to-retire



You are reading from the blog:  http://www.baby-boomer-retirement.com

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No Social Security COLA in 2016 - Medicare Rates Rise for Millions

UPDATED with new figures as of 10/30/15:  Millions of Social Security and government pension beneficiaries will be disappointed to learn that there will be no Social Security increase in 2016.  As compensation, approximately 6 out of 7 Medicare beneficiaries will also see no increase in Medicare premiums, either.  However, there are exceptions.  In fact, approximately 14 percent or 1 out of 7 people will have a premium increase.  However, as part of the October, 2015 budget agreement, the size of the premium increase was decreased from 52 percent to approximately 14 percent over what they are currently paying.

Why There Will be No Increase in Social Security Benefits

In the past 40 years, there have only been two other times in which Social Security beneficiaries did not receive a COLA or cost-of-living adjustment.  The years in which this occurred were 2010 and 2011.  Now it has been announced that this will happen once again in 2016.

The COLA is based on the consumer price index rate of inflation.  Primarily because of lower oil prices, inflation was deemed to be too low to trigger a cost-of-living increase.  For millions of retirees who have seen their rent, property taxes, medicine or other expenses rise, this will come as a hard blow.  The majority of retirees are less impacted by changes in the price of gasoline than they are by changes in their medical and other living costs.

Most Medicare Beneficiaries Will Continue to Pay the Same Part B Premiums

The only good news in this situation is that Medicare premiums will not go up for most beneficiaries because of a "hold harmless" clause in the Medicare law.  The hold harmless clause is intended to protect most Medicare beneficiaries during years in which there is no increase in Social Security benefits.  This means that the majority of people will continue to pay the current rate of $104.90 a month during the coming year.

People who will not have a Medicare premium increase must meet these requirements:

*  They are currently paying the standard Part B premium of $104.90 and they have the premiums automatically deducted from their Social Security checks.

*  They qualify as low-income beneficiaries and their Part B premiums are paid by the state in which they live.

Millions of Medicare Beneficiaries Will See an Increase in Their Part B Premiums

While most Medicare beneficiaries will fit into one of the above categories, approximately 1 in 7 will see an increase in their premiums.  This increase will be 14 percents (down from 52 percent) because Congress passed legislation that would reduce the size of the increase.

People who will have a Medicare premium increase fall into these categories:

*  You have an above-average income that requires you to pay more than $104.90 for your Part B premiums.  You will see an additional increase, even if you also receive Social Security benefits and your premiums are deducted from it.

*  You are enrolled in Part B and receive Social Security, but you pay your premiums directly to Medicare, rather than having them automatically deducted.

*  You are paying permanent penalties for Part B, because you were late to sign up for the program.

*  You are not currently enrolled in Part B, but will sign up in 2016.  New members to the program will be paying the higher premiums.

What is Medicare Part B and How Much Will The New Premiums Be?

Medicare Part B is the program that pays for doctor visits and outpatient care.  These are the benefits that are covered by our Medicare premiums.

If you fall into one of the groups that will be paying more, most people can expect to pay $120 a month, plus a $3 surcharge, for a total of $123.  In order to reduce the size of the premium increase (which originally was going to be 52 percent), the Medicare trust fund had to take out a loan from the U.S. Treasury.  The loan will be paid back over a period of five years, using the $3 surcharge. Premiums will continue to go up over the next few years, but at a slower rate.

However, some people will pay far more than that.  Those who already pay the highest premiums because they are in the top income groups could see their premiums rise from the current level of $335.70 a month to approximately $386 a month (an additional 14 percent, plus the $3 surcharge).

Are These Rate Increases Set in Stone?

While the formula for determining who pays the higher rate and how much it will be is set by law, Medicare administrators do have the ability to intervene and "soften the impact" on those who will face the highest rate increases.

Fortunately, Congress did take action this year as part of the 2015 budget compromise and chose to soften the blow.  While millions of people will still be paying higher premiums, they will not be as bad as were originally projected.


If you are retired or facing retirement and you want more information on financial planning, where to retire, healthcare issues, and changing family relationships, use the tabs or pull down menu at the top of the page to find links to hundreds of additional helpful articles.

NEW SOURCES:

https://www.yahoo.com/finance/news/medicare-premium-increases-not-bad-062532254.html

https://www.yahoo.com/finance/news/budget-deal-cutting-social-security-040000781.html

Source:  http://www.aarp.org/health/medicare-insurance/info-2015/medicare-part-b-premiums-could-spike.html

You are reading from the blog:  http://www.baby-boomer-retirement.com

Photo credit:  morguefile.com