Social Security

Starting on January 1, 2021, Social Security beneficiaries will see a boost in their benefits. Over 70 million recipients of Social Security and Supplemental Security income will receive a COLA bump of 1.3% in their monthly payouts.

This increase is lower than the increase of 1.6% for 2020 by 0.3%. It’s also 0.1% lower than the average COLA of 1.4% that recipients have received over the last decade.

The average Social Security recipient will see a monthly bump-up of about $20 overall. In other words, that will be an increase from an average benefit of $1,523 in 2020 to $1,543 in 2021. Read More

For the past few decades, people have been living longer than what Social Security was designed to pay out for. Millions of new retirees are joining the ranks of Social Security benefits recipients, now and in the coming decades.

In time, the outflowing payments to Social Security beneficiaries will start exceeding what Social Security has in reserves. The Social Security Administration will then have a decision to make.

It will have to rely more on the inflows from payroll taxes (and possibly other funding measures) in order to keep up its promised benefits payments to future generations of retirees.

Before the pandemic crisis, Social Security was looking at its reserves being depleted by roughly 2035. But now, over 20 million people have lost their jobs as a result of the spread of the coronavirus.

That is 10% of the U.S. workforce. Payroll taxes that would be pouring into the U.S. Treasury from everyone’s paychecks have lessened considerably. As a result, Social Security has been dipping further into its reserve funds in order to keep up its promises to retirees and other benefits recipients. Read More

As you gear up for crucial retirement decisions such as Social Security, you may have heard of “full retirement age.” The Social Security Administration refers to full retirement age as “normal” retirement age. This is the age at which you will receive 100% of your monthly retirement benefit.

But full retirement age isn’t the same for everyone. For those born before 1943, this is age 65. For those born after that year, full retirement age can range from 66 to 67 years old.

This matters for eligible recipients because choosing when they begin receiving benefits is one of the most important retirement decisions that they might make. Making the right choice can make a difference of tens, or even hundreds of thousands of dollars, in the lifetime benefits they are paid.

You can start taking Social Security benefits once you turn 62, but your benefit will be permanently reduced by 30% or more. You will have to wait until you reach your full retirement age to get your full benefit.

And if you delay collecting benefits until after your full retirement age? Then you can increase the amount you receive by about 8% per year until age 70. Waiting to take your benefits at 70 will increase your monthly benefit about one-third more than your regular full benefit. Read More

On October 10, the Social Security Administration officially released the amount of their cost-of-living adjustment for 2020. Almost 70 million Americans will see their Social Security benefits rise by 1.6% next year.

While this raise is less than the 2.8% cost-of-living-adjustment for 2019, it’s still higher than the 1.4% average COLA that participants have received over the past decade. The Senior Citizens League was also spot on with its projection for Social Security next year. Read More

While the exact details are still under wraps, Social Security recipients will be pleased to know that their benefits will be receiving a boost in 2020.

Every October, the Social Security Administration releases information regarding Cost-of-Living Adjustments to benefits. This year is no exception. On October 10th, the SSA will be releasing official details regarding the Cost-of-Living Adjustment that applies to 2020 Social Security payouts.

Expect a Social Security Benefits Boost of 1.6%

According to The Senior Citizen League, a nonpartisan group focused on senior issues, Social Security recipients will likely receive a 1.6% boost to their payouts, starting in 2020.

The league tracks data relating to how the SSA calculates its Cost-of-Living Adjustments. It bases their estimate on quarterly movements in the consumer price index for urban wage earners and clerical workers (CPI-W).

Mary Johnson, TSCL’s Social Security policy analyst, mentions that this increase will be smaller than prior raises. She said that it “would raise an average retiree benefit by about $23.40 per month, a big drop from the $40.90 that people with that level of benefits received this year.” Read More

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Millions of retirees depend on Social Security benefits as a major income source. For many people, it’s their primary income stream.

According to data from the Social Security Administration, and analysis by the Center on Budget and Policy Priorities, nearly two-thirds of elderly benefits recipients count on Social Security as their major cash income source.

But some news headlines in recent years have stirred public concerns about the program’s future. Dour, and even alarmist, news coverage of reports by the program trustees led many onlookers to wonder about the program’s solvency.

To help cut through lingering confusion, two economists participated in a public debate, hosted by the Soho Forum. Set up as an Oxford-style debate, the discussion tackled this resolution: “Given Social Security’s nearly $3 trillion trust fund, the system cannot add to the federal deficit.” Read More

Sure, you can start your Social Security benefits at age 62. But is it better to claim early or delay benefits until a later date?

While a one-size-fits-all answer doesn’t work for everybody, a new study suggests that ill-timed Social Security strategies are costing Americans dearly.

United Income found that retirees might lose $3.4 trillion in potential income due to timing of when they enroll for their benefits. The research was a joint effort between the fintech company and former top policy officials from the Social Security Administration.

What about the income effect on retirees at a personal level?  On average, each retired household would miss out on $111,000 of lifetime benefits. And for current retirees, premature decisions could add up to collective losses of roughly $2.7 trillion.

That would average out to roughly $67,000 in lost income per household. Read More

Good news, Social Security beneficiaries! Every year in mid-October, the Social Security Administration announces any cost-of-living adjustments to benefits – or “COLAs.” On October 12, the agency said that Social Security recipients would see a 2.8% COLA in 2019.

Until now, the 2018 cost-of-living adjustment had been the largest bump-up in benefits since 2012. What accounted for the heftier increase this year?

A rise in the cost of energy products, not to mention an increasing cost of shelter, were big inflationary contributors, according to experts. Both of those cost categories have heavy weightings within the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), the Department of Labor index on which COLAs are based.   

For Social Security beneficiaries, the increased benefit payouts will start in January 2019. People receiving SSI benefits will see the increase on December 31, 2018. Read More

Claiming Social Security Early is a critical decision for many soon-to-retire households. According to David Freitag, a Social Security benefits expert at Mass Mutual, understanding the present value of monthly benefits could exceed $1 million. With longer life spans and increased expenses, knowing the true impact of benefits is crucial. As noted by MassMutual’s U.S. head, this choice isn’t just about retirement planning; it’s about planning for longevity. Despite potential benefits starting sooner, early claimants face significant trade-offs based on their chosen start age. Read More

Guess what, class. The results are in… and most of us did not pass a very important test. Nearly half of Americans age 50+ failed a basic Social Security quiz, according to a newly released nationwide consumer poll by MassMutual Life Insurance Company.

Why should this news alarm us all? Because Social Security is a major income source for many Americans in retirement. And if we don’t know how to maximize our benefits, or even know what questions to ask regarding how to get our best payout, it can hurt us. We may be leaving money on the table when we need that income the most — whether enjoying healthy income for your lifestyle or enjoying greater income certainty for monthly retirement expenses.

In some sense, it’s as if each point not scored is potentially a dollar amount of benefits we may lose, unless we start paying closer attention. It’s time to consider how much in Social Security benefits we have accrued and start exploring strategies to maximize them.

“Getting Social Security right is critically important to inform plans for other income stream needs later in life as it may be difficult, and sometimes not even possible, to hit the reset button,” said Mike Fanning, head of MassMutual, U.S. “This is not a retirement planning conversation. This is a longevity planning conversation, and near-retirees have the power and responsibility to ensure that they protect and receive every dollar they deserve in Social Security retirement benefits when the time comes.” Read More