Offbeat: Social Security benefits to rise 2.8% in 2019 - PressFrom - US
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Offbeat Social Security benefits to rise 2.8% in 2019

16:55  11 october  2018
16:55  11 october  2018 Source:   fool.com

3 things to know about claiming Social Security at 62

  3 things to know about claiming Social Security at 62 Thinking of taking benefits at 62? Here's some information that might guide your decision.The upside of filing for Social Security as early as possible is that doing so gives you access to your benefits immediately. The downside, however, is that filing at 62 means reducing the amount you collect in Social Security each month, and quite possibly for life. Your benefits will take a 6.67% hit each year for the first three years you file ahead of FRA, and a 5% hit for each year thereafter. This means that if your FRA is 67 and you file at 62, you'll only end up collecting 70% of your full monthly benefit month after month.

Understanding how Social Security 's COLA is calculated. However, beneficiaries don't have to wait for the official announcement from the SSA to calculate The good news for beneficiaries is that prices most definitely rose on a year-over-year basis. Let's dive in to take a precise look at how the 2019

the average Social Security benefit for a retired worker will rise by a month to ,461 in 2019 , while the average benefit for a retired couple will grow a month to Part B premiums, which cover doctors’ and outpatient services, are expected to rise modestly from 4 to 5.50 a month.

A Social Security card wedged in between cash bills.© Getty Images A Social Security card wedged in between cash bills. Social Security is arguably the nation's most important social program, with data showing that 62% of aged beneficiaries lean on their monthly payout to account for at least half of their income. Further, a report from the Center on Budget and Policy Priorities finds that 22.1 million people, including 15.1 million seniors, are kept out of poverty thanks to their Social Security checks.

With this in mind, it's only fitting that the most important event of the year for these folks is the cost-of-living adjustment (COLA) announcement (i.e., the "raise" the beneficiaries will receive next year) from the Social Security Administration (SSA) during the second week of October. That announcement just happens to be today, October 11.

Why retirees' tax rates may be higher than they expect

  Why retirees' tax rates may be higher than they expect You may retire, but the IRS won't.Though high-income retirees are looking forward to lower taxes once they've exited the workplace, they can still expect to pay stealth taxes in the form of Social Security income levies and higher Medicare premiums.

By law, federal benefits increase when the cost of living rises , as measured by the Department of Labor’s Consumer Price Index for Urban Wage Earners and Clerical Workers As a result, more than 67 million Americans will see a 2 . 8 percent increase in their Social Security and SSI benefits in 2019 .

P.M. Edition for October 11: Social Security recipients will see a 2 . 8 percent increase in their benefits next year. The Wall Street Journal's Eric Morath says it's the largest cost-of-living adjustment in seven years. Looking for more episodes? Find them wherever you listen to podcasts.

Understanding how Social Security's COLA is calculated

However, beneficiaries don't have to wait for the official announcement from the SSA to calculate their Social Security COLA for 2019. Once the Bureau of Labor Statistics (BLS) has released its September 2018 inflation data, we have all the information needed to determine how much of a raise Social Security recipients will receive next year.

You see, Social Security's inflationary tether, the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), only takes into account three months of inflation data rather than a full year. The average reading of the CPI-W during the third quarter of the previous year (July through September) acts as the baseline figure, while the average reading from the third quarter of the current year is the comparison. It takes the BLS a good week or so to compile all the data for the CPI-W's main spending categories and subcategories, which is why the data release doesn't come out until the second week of the following month.

3 Social Security mistakes that could cost you a fortune

  3 Social Security mistakes that could cost you a fortune Avoid these major blunders that could shrink your benefits for life.Though your Social Security benefits are based on how much you earned during your working years, the age at which you first file for them could impact your monthly payments. That's why it's crucial to know your full retirement age, which is the age at which you're entitled to your monthly benefits in full.

Retirees who are collecting Social Security retirement benefits have reason to cheer: Your Social Security checks will be larger next year. The Social Security Administration announced that the cost-of-living adjustment for 2019 will be 2 . 8 percent.

Social Security benefits will increase 2 . 8 percent in 2019 , the largest cost-of-living adjustment (COLA) in seven years. Unfortunately, the cost of living increase may not adequately cover their expenses that rise faster than inflation including health, prescription drug, utility and housing costs.”

If the average reading from the third quarter of the current year rises from the average CPI-W reading from the previous year, then beneficiaries receive a raise that's commensurate with the percentage increase, rounded to the nearest 0.1%. And should prices fall year over year, as happened in 2010, 2011, and 2016, benefits remain static from one year to the next.

The good news for beneficiaries is that prices most definitely rose on a year-over-year basis. Let's dive in to take a precise look at how the 2019 Social Security COLA was determined.

A senior counting a fanned pile of cash.© Getty Images A senior counting a fanned pile of cash.

Here's your 2019 Social Security COLA

We begin by laying out the three important CPI-W readings from the third quarter of 2017 that form the baseline figure.

  • July 2017 CPI-W: 238.617
  • August 2017 CPI-W: 239.448
  • September 2017 CPI-W: 240.939

If these figures are added up and divided by three (since there are three months taken into account), then the average CPI-W reading works out to 239.668.

3 reasons it's dumb to take Social Security at 62

  3 reasons it's dumb to take Social Security at 62 Before you file for benefits as early as possible, think about what you'll be giving up.Though your benefits themselves are calculated based on your earnings during your working years, the age at which you first file for them has an impact, too. If you claim benefits at full retirement age, which, depending on your year of birth, is either 66, 67, or 66 and a certain number of months, you'll get the full dollar amount your work record entitles you to, payable on a monthly basis.

The Social Security Administration on Thursday announced a 2 . 8 -percent increase for Americans' Social Security benefits in 2019 , the largest A number of Democratic lawmakers praised the COLA increase but also said an expansion of the program is needed given the rising costs of seniors'

Retired Americans who collect Social Security can look forward in 2019 to the biggest increase in benefits in seven years. Retirement benefits are slated to rise 2 . 8 % next year, based on the formula that determines annual cost-of-living adjustments in Social Security . It’s the biggest gain since a

With the release of September's CPI-W data today (October 11), we now have the final piece of the puzzle to figure out the comparison figure for 2018.

  • July 2018 CPI-W: 246.155
  • August 2018 CPI-W: 246.336
  • September 2018 CPI-W: 246.565

Like before, if we add these figures up and divide by three, we get an average of 246.352. If we then subtract the average third-quarter reading in Q3 2017 from the average CPI-W reading in Q3 2018, we're left with 6.684. Divide this figure by the average reading of 239.668 from the third quarter of last year, and we get a 2019 COLA of 2.8% when rounded to the nearest 0.1%.

For context, this is the highest annual raise that beneficiaries have received in seven years.

A confused elderly man looking at a small pile of coins in a woman's hand to his left.© Getty Images A confused elderly man looking at a small pile of coins in a woman's hand to his left.

Before you get too excited, remember this

Of course, Social Security recipients, or should I say more specifically aged beneficiaries, aren't going to want to break out the champagne just yet. That's because the CPI-W has a natural flaw, which results in seniors losing purchasing power over time on their Social Security income.

Social Security beneficiaries set to get biggest bump in seven years

  Social Security beneficiaries set to get biggest bump in seven years Retired Americans who collect Social Security can look forward in 2019 to the biggest increase in benefits in seven years. Retirement benefits are likely to rise about 2.8% next year.Retirement benefits are likely to rise about 2.8% next year, based on the formula that determines annual cost-of-living adjustments in Social Security. It would mark the biggest gain since a 3.6% advance in 2012.

Law requires that federal benefit rates increase when the cost of living rises , as measured by the Department of Labor’s Consumer Price Index for Urban More than 67 million Americans will see a 2 . 8 percent increase in their Social Security and SSI benefits in 2019 . This month marks other changes

The Social Security Administration announced that benefits will increase by 2 . 8 % in 2019 . That is the largest cost-of-living adjustment since 2012. The average monthly benefit for a couple who are both receiving benefits will rise from ,381 to ,448. And the maximum Social Security benefit for a

According to a report from The Senior Citizens League, the purchasing power of Social Security dollars has declined by an almost jaw-dropping 34% since 2000. Put another way, what $100 worth of Social Security benefits could buy 18 years ago can now only buy $66 worth of those same goods. Inflation (i.e., the rising price of goods and services) has eaten the rest.

You're probably scratching your head and wondering how the CPI-W, which is designed to measure inflation, has allowed Social Security's COLA to so vastly underrepresent the inflation that senior citizens are facing. The answer lies with the group of folks the CPI-W is following.

As the name implies, the CPI-W measures the spending habits of urban wage earners and clerical workers, who spend their money very differently than seniors do. This results in substantially more weight being placed in spending categories unimportant to aged beneficiaries, like education and transportation, while critical expenses like medical care and housing don't get as much attention as they should. As a result, the purchasing power of Social Security dollars remains in constant decline for the seniors who rely on the program.

In other words, seniors should definitely relish the fact that they're on track to receive their biggest COLA since 2012, but they're not going to gain any ground they've lost due to inflation since 2000.

Your Social Security benefits got a 2.8% boost next year. Here's how that actually impacts you.

  Your Social Security benefits got a 2.8% boost next year. Here's how that actually impacts you. Social Security's cost-of-living adjustment for 2019 is the largest increase in recent years. Here are several steps you can take to make the most of that hike.That is the biggest increase since 2012, when beneficiaries saw a 3.6 percent increase.

The Social Security Administration announced this week that the cost-of-living adjustment to benefits will be 2 . 8 percent in 2019 . That is the biggest boost benefits have seen since 2012. Experts weigh in on how you can make sure you maximize the benefits of that boost to your monthly checks.

The Social Security Administration announced that benefits will increase by 2 . 8 % in 2019 . The average monthly benefit for a couple who are both receiving benefits will rise from ,381 to ,448. And the maximum Social Security benefit for a worker retiring at full retirement age will increase

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Here's the Average Social Security Benefit for 2019.
Social Security benefits are going up next year. This is what the typical senior can expect.

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