The Social Security Administration (SSA) has recently announced that Social Security and SSI beneficiaries will receive a 1.5 percent cost-of-living (COLA) adjustment for 2014. According to the SSA’s announcement, after the COLA adjustment, the estimated average retirement benefit will rise from $1,275 in 2013 to $1,294 in 2014. Here are the other primary changes to Social Security in the year ahead:
» The Centers for Medicare & Medicaid Services (CMS) has also announced next year’s Medicare costs. The standard monthly Medicare Part B premium will be $104.90 in 2014, the same as in 2013. However, beneficiaries with higher incomes (individuals with taxable incomes of more than $85,000 and couples with taxable incomes of more than $170,000) will pay more than $104.90 per month because they must pay an income-related surcharge. Other important Social Security and Medicare figures are listed below.
» Pertaining to Social Security benefits, the amount of taxable earnings subject to the Social Security tax (called the maximum taxable earnings limit) will increase to $117,000 from $113,700 in 2013.
» The annual retirement earnings test exempt amount for beneficiaries under full retirement age will increase to $15,480 from $15,120 in 2013. If a beneficiary has earnings that exceed the exempt amount, $1 in benefits will be withheld for every $2 in earnings above the exempt amount.
» The annual retirement earnings test exempt amount that applies during the year a beneficiary reaches full retirement age will increase to $41,400 from $40,080 in 2013. If a beneficiary has earnings that exceed this amount, $1 in benefits will be withheld for every $3 in earnings above the exempt amount.
»The amount of earnings needed to earn one Social Security credit will increase to $1,200 from $1,160 in 2013.
Here are the changes to Medicare for the year ahead:
» The Medicare Part B deductible for next year will be $147 -same as in 2013.
» The monthly Medicare Part A premium for those who need to buy coverage will cost up to $426, down from $441 in 2013. However, most people don’t pay a premium for Medicare Part A.
» The Medicare Part A deductible for inpatient hospitalization will be $1,216, up from $1,184 in 2013. Beneficiaries will pay an additional daily co-insurance amount of $304 for days 61 through 90, up from $296 in 2013, and $608 for stays beyond 90 days, up from $592 in 2013. Additionally, Beneficiaries in skilled nursing facilities will pay a daily co-insurance amount of $152 for days 21.
There is no question today that Social Security and Medicare are a key financial component to the financial lives of millions of Americans particularly as it relates to retirement issues. This issue is particularly important here in the Mississippi Delta for those already retired. Two thoughts, however, come to mind with this: First; for those looking to retire soon, adequate preparation requires a lot more than just reliance on social security and two, you may live a lot longer than you think.
This Month’s Parting Shot: There was an interesting article recently published as to the state of big time college football today and, in particular, the compensation of head coaches with major football programs. According to USA Today, the average pay for a major-college head coach is $1.81 million — a rise of 10 percent alone since last season and more than 90 percent since 2006. Among Division 1 FBS (Football Bowl Subdivisions) schools, median athletic spending per student-athletes increased 51 percent from 2005 through 2010 while median academic spending per student rose by 23 percent in the same period. Nick Saban of Alabama reportedly is the highest paid major college head football coach at $5.5 million per year. Interestingly, every head coach at SEC public Universities is paid at least $2 million per year (this excludes Vanderbilt, a private school, which does not have to disclose what it pays its head football coach). As a point of comparison, Johnny Vaught, who coached at Ole Miss and enjoyed a great deal of success from 1947 to the early 1970’s, never earned more than $35,000.
Information provided is general in nature and not intended as specific financial advice
Ike S. Trotter, CLU, ChFC is a credentialed Financial Advisor in Greenville. Securities and Investment Advisory Services provided through Woodbury Financial Services, Inc., Member: FINRA, SIPC and Registered Investment Advisor, PO Box 64284, St. Paul, MN 55164. Tel: 800.800-2638. Some content provided Broadridge Financial Solutions, Inc., IKE TROTTER AGENCY, LLC and Woodbury Financial Services, Inc. are not affiliated entities.