Changes to Social Security in 2020
A new year brings changes to Social Security benefits that tens of millions of Americans rely on. For 2020, seniors can expect to receive more in their benefits check and to be allowed to earn more before the Social Security Administration (SSA) deducts benefits. Below, we highlight some of the more significant changes that could impact the community in The Villages.
Your Monthly Benefits Should Increase
Benefits should keep pace with inflation so that retirees do not lose purchasing power. For 2020, the cost of living adjustment (COLA) will be 1.6%. You should see the increase in your first check of the year. Someone who gets the average benefit, which according to AARP is $1,479, will see their monthly benefit check increase to $1,503.
The COLA also means that the maximum monthly amount that a retiree can receive will also jump, from $2,861 to $3,011.
You Will Have to Wait Longer to Earn Full Retirement Benefits
Workers can begin drawing benefits at age 62. However, a person will get considerably more in benefits if you wait until your full retirement age, which depends on the workers’ birth year.
For those born in 1958, the full retirement age will be 66 years and 8 months. Over the next 2 years, the full retirement age increases two months each year, until peaking at age 67 for anyone born in 1960 or after.
You Can Earn More in 2020
Retirees drawing benefits are allowed to work and continue to receive their monthly benefits. However, the Social Security Administration will reduce benefits $1 for every $2 a person earns once they reach a certain threshold. This limitation kicks in when a person is between 62 and their full retirement age (usually 66 or 67, depending on when you were born).
In 2020, the earnings limit will increase to $18,240. In the year you reach full retirement age, your earnings limit increases to $48,600. Remember, the earnings limit does not apply when someone reaches their full retirement age.
Work Credits are More Expensive
Generally, retirees need to earn 40 work credits before they can draw benefits. In 2020, the amount of wages you must earn to get one credit will increase, from $1,360 to $1,410. Workers can earn a maximum of 4 credits in a year.
Changes Coming to Medicare Also
The new year will also see significant changes to Medicare. Medicare Part B premiums should be increasing $9 to $144.60. The average deductible will also increase $11 to $198 a year.
Supplemental Plan F and Plan C will also be unavailable to those who become eligible in 2020. These supplemental plans had helped cover the cost of Medicare Part B deductibles. Lawmakers want retirees to pay a deductible so that they only visit the doctor when necessary.
Millhorn Law Firm is Here for Your Elder Law Needs
As we age, our medical needs change. Legal needs change also. At Millhorn Elder Law Planning Group, our team can help with estate planning, guardianship, and other issues. Contact us today to schedule a free consultation.