As with every year, 2016 is sure to bring a number of changes to the existing Social Security benefits program. If you are one of the millions of Americans that are set to collect Social Security benefits in the coming year, it is important that you keep a lookout for these key changes and plan accordingly.
- Payments will not increase: Due to a drop in the nation's Consumer Price Index (CPI), benefit recipients will not receive an increase in their monthly checks. While 2015 recipients were given a 1.7% increase in their checks in the form of a cost-of-living adjustment, 2016 will not see this same benefit.
- Maximum benefits will drop: Since there will not be a cost-of-living adjustment and the national average wage index has risen, high-income workers who are applying for Social Security benefits in 2016 will be eligible to receive slightly less than those in 2015. Recipients will be able to receive a maximum of $2,639 in monthly benefits, about $24 less than last year's maximum.
- Taxes will still be subject to a cap of $118,500: While taxation typically changes from year to year, the amount of Social Security payroll taxes will stay the same at 6.2%, maxing out at $118,500 per person.
- Credits will cost more: Social Security payments are based on a "credit" system, where a person earns quarters of coverage every year depending on their wages. A person can earn up to four credits per year, with retirees needing a minimum of 40 credits in order to collect benefits. In 2016, the cost to earn one credit will increase by $40 over 2015, meaning that it will cost more than $5,000 in earnings to earn all four of your credits this coming year.
- Earnings test figures will not change: If a person chooses to collect Social Security benefits early before they have reached age 65 but choose to continue to work, they can lose some of their benefits if they earn more than a certain amount. This amount will stay the same in 2016 at $15,720. For every $2 earned over this amount, benefit recipients will forfeit $1 in benefits. If a person is set to turn 66 in 2016, this limit will jump to $41,880 with $1 lost for every $3 earned over the limit. Once a person turns 66, however, they can earn as much as they desire without forfeiting anything.
Contact an Arkansas Social Security Disability Lawyer
Do you need assistance getting your Social Security benefits? At the Law Office of Mike Angel, our firm's highly knowledgeable Arkansas Social Security attorneys can cut through all the red tape and bureaucratic nonsense and improve your chances of securing the compensation you deserve. We have helped thousands of clients over more than two decades of service, and we are eager to walk you through the process and handle the legal heavy lifting on your behalf.
Call our office today at (888) 873-4229 or contact us online to get started!