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Seven Changes to Social Security in 2013

Seven Changes to Social Security in 2013

Social Security is an important part of any retirees’ income.  By collecting taxes from paychecks, the program supports people who are unable to take care of themselves.  Current estimates are that 40% of Americans over the age of 65 are kept out of poverty from the benefits proved by the Social Security Administration.

2013 brings 7 new changes to a social service that has existed since 1935, as follows:

1. Payroll Tax Increases

There was a temporary tax cut in place for 2012 that expired in 2013.  Wage-earners who used to pay 4.2% of their income will now contribute 6.2% up until $113,700.

2. Higher Tax Cap

The payroll tax cap has also increased by $3,600 from $110,100 in 2012 up to $113,700 in 2013.  That is the most that can be taxed under this new rule which means that nearly 10 million will pay more taxes.

3. New Online Services

Most transactions such as starting Social Security or changing addresses can now be completed online.  The hope is that this will create less of a cost to have offices open throughout the day.

4. Reduced Office Hours

Offices will close earlier than last year in order to limit overtime pay to workers and save money.

5. No More Paper Checks

All payments will be either directly deposited into a bank account or loaded on a prepaid debit card.

6. Higher Earnings Limit

Occasionally, people will work and collect Social Security.  Now, people between 62 and 66 may have some or all of their benefits withheld.  Between 62 and 65, people who earn over $15,120 will have $1 withheld for each $2 of income over that limit.  At 66, people who earn over $40,080 will have $1 withheld for each $3 over the limit.

7. Bigger Benefits

There will be a cost-of-living increase that will add 1.7% to benefit checks.  The average check will increase from $1,240 to $1,261 per month.

As you consider the costs associated with being older, it may be beneficial to consider long term care insurance.  As Medicaid and Medicare take care of some hospitals bills, there are other expenses that are not handled.  60% of those over 65 require some type of long term care.  Contact an experienced long term care insurance agent at Wise Insurance Agency in Marin County today.

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