Changes to Social Security in 2020, Social security, so one of the significant benefits and the majority of your income after retirement, depend upon social security for many. With this, you can get an idea of how important it is for some. As a social security recipient, you must know that the SSA announces all the annual changes every October to be effective in this program shortly.
2020 social security changes were also announced in October 2019, but if you have skipped any essential details, you are at the right place. These changes mentioned below are in effect since January 1st. Read this post to get 2020 social security updates.
Changes to Social Security in 2020
First of all, social security is a significant financial program in the united states of America, and every year lots of changes are made to this complicated process. Having a social security account is essential, and you can check all your SS updates within minutes. 2020 is a crucial year, and if you have not checked 2020 social security updates, it is time.
There are many useful additions made to the financial packages in the social security 2020 benefits program. There are six updates, and all of them are positive news for the social security benefits holder.
Change in the retirement age
The earliest you can obtain your SS benefits is when you are 62. However, if you apply for your SS benefits before that, your benefits are reduced. If you are going to turn 62 in 2019, the full retirement age was 66 years and 6 months. Now, according to the new law of social security, the retirement age is going to increase by 2 months every year until you reach 67.
If you are turning 62 in 2020, the full retirement age will be 62 years and 8 months. Keep in mind that the more you delay, the prettier your social security benefits are going to be.
1.6% increase for the beneficiaries in 2020
In 2020 there will be approximately 69 million recipients who are going to receive a 1.6% increase in their social security benefits. This adjustment will help the recipients in keeping up with the inflating economy. It is based on the CPI-Wand calculated by the BLS.
If CPI-W is going to lift more than 0.1% every year between the 3rd quarter of the last year and the 3rd quarter of the current year, the benefits of SS will be raised by a similar amount. This 1.6% increase for 2020 if compared with the last year 2019, which is 2.8% COLA, it is the biggest bump since 2012. 1.6% raise is $25/month.
Earning limits are increased
If you are working and also receiving your SS benefits, your full benefits can be withheld temporarily, depending upon the amount you earn. These income limits are increased by a bit in 2020. Earlier as a social security recipient, you are now allowed to earn up to $18,240.
After that, one dollar will be abstracted from your income for every two dollars that surpass the limits. The annual limit in 2020 represents a six-hundred-dollar hike over the last year’s limit of $17,640.
If you are reaching your full retirement age in 2020, you can earn %48,600 up $1,680 from the 2019 yearly limit of $46,920. Now, every three-dollar recipient will be able to earn above the 2020 limit, and your SS benefits will be deducted by one dollar.
However, this is going to depend upon the income you have earned in the months before reaching your full retirement age. Once you have achieved your full retirement age, there will be no deduction of any amount or withheld if you ever wish to work.
Utmost taxable income rose to $137,700
Last year employees had to pay 6.2% SS tax on earnings up to $132,900. If you have earned more than this figure, then that money was not subjected to tax. In 2020 the amount of tax is the same which is 6.2%, but the earnings cap has lifted to $137,700.
The turning point is that the taxable utmost earnings have increased, and so is the maximum figure of income used by the social security administration to calculate benefits for social security retirement. In 2019, the monthly benefit at full retirement age for a worker who has retired was $2,861.
In 2020, this benefit has increased up to $150/month to $3,011 Note: – recipients of social security can obtain a 32% hike in the payment every month if they claim their SS benefits when they reach 70 years, preferably at their full retirement age.
2035 far slightness
According to the recent annual reports from the Medicare and SSA trustees, both these funds will be exhausted as of 2035. If these are future predictions, then beneficiaries will get more benefits. As a social security beneficiary, you will receive 75%, which is about 3 quarter’s scheduled benefits until 2093.
Disability benefits also, get a hike in 2020
There are ten million US citizens who are going to receive social security disability benefits in 2020, and the good news is that there is a hike in the payment for them. If you are legally blind, then the maximum income you will be receiving is $2,110/month, which is a hike of $70/month from the last year. For the non-blind social security beneficiaries, the hike will be $40/month, and the total income is $1,260.
These are the 6 significant changes in the social security benefits for 2020. The goodness is that the beneficiaries have many good things in 2020, and there are noticeable hikes in income.
Now you can even earn more amounts while you are receiving benefits, which is good news for those who have retired, obtaining benefits, and continue working. The tax rates for 2020 are the same, which is another significant relief for social security beneficiaries.