Nearly 63 million Americans receive either Social Security or Supplemental Security Income (SSI) benefits. In 2014, these recipients will see their benefits rise 1.5%, thanks to annual cost-of-living (COLA) adjustments. Beginning in January 2014, for the average retiree, monthly benefits will rise $19 to $1,294.
In addition to benefit amounts, inflation will also affect other Social Security-related figures. The maximum wage base on which Social Security payroll taxes are assessed will increase from the current level of $113,700 to $117,000. Consequently, the Social Security Administration estimates that 10 million workers will pay more in Social Security taxes due to the inflation adjustment.
Certain thresholds will also rise. For example, the maximum amount that Social Security recipients younger than full retirement age can earn without forfeiting benefits will climb by $30 per month to $1,290.
The 1.5% COLA increase was preceded by a 1.7 percent COLA for 2013, 3.7% adjustment in 2012, and a 0% adjustment in 2010 and 2011. For more specifics on the Social Security COLA and other related inflation adjustments, view the 2014 Social Security Changes Fact Sheet on the Social Security Administration’s website.
Seniors spend more on health care than the younger population, and government figures show the cost of medical care rising twice as fast as other prices, up 2.4% over the past year. The meager 1.5% increase won’t be enough to cover these rising costs. While it’s great if you’re able to supplement your Social Security income with a traditional pension or personal savings, millions of people count on Social Security as their primary source of retirement income. If you are living on Social Security alone, please see our recent blog post for more details.
What if you are living on social security alone and you or a loved one becomes incapacitated? If you have a loved one who is nearing the need for long-term care or already receiving long-term care or if you have not done Long-Term Care Planning, Estate Planning or Incapacity Planning (or had your Planning documents reviewed in the past several years), now is a good time to plan. Learn more at The Fairfax and Fredericksburg Medicaid Asset Protection Law Firm of Evan H. Farr, P.C. website, or call us at our Virginia Elder Law Fairfax office at 703-691-1888 or at our Virginia Elder Law Fredericksburg office at 540-479-1435 to make an appointment for a no-cost consultation.