Social Security benefits will be changing slightly in the coming months.
As 2015 comes to an end, it is time to start figuring out what the new year will mean for your Social Security benefits. Keep this guide in mind to help you stay ahead of the changes to your Social Security benefits in 2016.
Stagnant tax cap
When there is no change in the cost of living adjustment, there is also no change in the maximum amount of your earnings that are subject to the Social Security tax. In 2016, earnings above $118,500 will not be subject to the Social Security part of the payroll tax.
No payment increase
For the third time since the automatic cost of living adjustment started in 1975, there will be no Social Security payment increase for 2016. The average monthly benefit for those that are retired will be $1,341 per month, and retired couples who are both receiving their Social Security benefits will receive $2,212 each month.
Unchanged earnings limit
The earnings limit for those who work and also claim Social Security will stay at $15,720 for people who are 65 years old and younger in 2016. If you will be turning 66 in 2016, the earnings limit increases to $41,880.
Maximum possible benefit declines
The maximum possible Social Security payment for workers who are 66 years old and sign up for Social Security in 2016 will be $2,639 each month, which is down from the $2,663 in 2015. A decrease in the full maximum benefits only happens when there is no cost of living adjustment, but the national average wage index increases.
For more information on the Medicare changes for 2016, contact SeniorChoices NW in Wilsonville, Oregon.