Support our online development, and advance our onground research initiatives in free market economics, as we seek to showcase the brightest Next-Gen minds.
THE ME-P DISCLAIMER: Posts, comments and opinions do not necessarily represent iMBA, Inc., but become our property after submission. Copyright © 2006 to-date. iMBA, Inc allows colleges, universities, medical and financial professionals and related clinics, hospitals and non-profit healthcare organizations to distribute our proprietary essays, photos, videos, audios and other documents; etc. However, please review copyright and usage information for each individual asset before submission to us, and/or placement on your publication or web site. Attestation references, citations and/or back-links are required. All other assets are property of the individual copyright holder.
Announcing a 3.6% COLA
By Children’s Home Society of Florida Foundation
On October 19th 2011, the Social Security Administration published a news release with increases in payments for 2012.
Based on the increase in costs this year and the economy, there will be a 3.6% cost-of-living adjustment (COLA) for 2012. This will result in increases both in contributions for some workers and in payments for retired persons.
Current Workers
Those current workers with higher incomes may be required to make larger payments. The Social Security wage limit for contributions (OASDI only) will increase from $106,800 to $110,100. The Medicare contribution of 1.45% will continue to apply to all earnings. Approximately 10 million workers are affected by this increased limit that changes their total contribution.
SS Old-Age, Survivors, and Disability Insurance
Social Security will continue to include the OASDI component of 6.2% and the Medicare portion of 1.45%, for a total of 7.65%. This contribution is required by both the employer and the employee. Self-employed persons will pay the total 15.3%.
Indexed Reduction
The potential reduction in payments for individuals between age 62 and their full retirement age is also indexed. The exempt portion increases from $14,160 to $14,640 per year. During the final year prior to the full retirement age, the limit in earnings prior to the full retirement date is increased from $37,680 to $38,880. Workers who exceed the applicable limit will lose $1 for every $2 in earnings above that amount.
Assessment
The maximum payment at full retirement age will increase from $2,366 per month to $2,513 per month. For all individuals receiving Social Security payments, the average payout is projected to increase from $1,186 to $1,229 per month.
Conclusion
Your thoughts and comments on this ME-P are appreciated. Feel free to review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Then, subscribe to the ME-P. It is fast, free and secure.
Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com
OUR OTHER PRINT BOOKS AND RELATED INFORMATION SOURCES:
- PRACTICES: www.BusinessofMedicalPractice.com
- HOSPITALS: http://www.crcpress.com/product/isbn/9781466558731
- CLINICS: http://www.crcpress.com/product/isbn/9781439879900
- ADVISORS: www.CertifiedMedicalPlanner.org
- FINANCE: Financial Planning for Physicians and Advisors
- INSURANCE: Risk Management and Insurance Strategies for Physicians and Advisors
- Dictionary of Health Economics and Finance
- Dictionary of Health Information Technology and Security
- Dictionary of Health Insurance and Managed Care
Share this:
Filed under: Retirement and Benefits | Tagged: and Disability Insurance, Children's Home Society of Florida Foundation, OASDI, Old-Age, Social Security Adjustments for 2012, Survivors |
The Leading Business Education Network for Doctors, Financial Advisors and Health Industry Consultants 
Six changes to Social Security in 2013
http://money.msn.com/retirement/article.aspx?post=b644e696-e528-477b-a931-a5be2479d922
Benefit recipients will get a small increase next year, and the maximum amount of earnings subject to the Social Security tax will rise.
Vishnu
LikeLike
Social Security
Defenders and critics of Social Security both make outlandish claims about the program.
But, in the end, the program’s financial imbalances require relatively small fixes, not a big overhaul. Any changes to Social Security will be relatively modest, take effect over a long period, and have relatively little effect on anyone past the age of 55.
Clem
LikeLike
UPDATE 2014
Beware – Earning too much after you sign up
If you are younger than your full retirement age and earn more than $15,480 in 2014, you will lose $1 in benefit payments for every $2 you earn above the limit. The year of your full retirement age, the earnings limit increases to $41,400, after which every $3 earned above the limit results in one benefit dollar being withheld. After you reach full retirement age, you can earn any amount without penalty, and your payment will be increased to give you credit for any withheld earnings.
Beware – Paying tax on your Social Security benefit
If your adjusted gross income, nontaxable interest and half of your Social Security benefit totals more than $34,000 ($44,000 for couples), up to 85 percent of your Social Security benefits could be taxable. If those income sources add up to between $25,000 and $34,000 ($32,000 and $44,000 for couples), up to half of your benefit may be taxable. Keeping your taxable retirement income below those thresholds could allow you to avoid paying tax on your Social Security benefit.
Gwen
LikeLike
Update 2014
Calculating PIA
Recently, a doctor nearing retirement age approached me with the question of how to maximize his social security income. He is 62, and his wife is 4 years his junior. He made substantially more money than his wife, and as a result, his PIA is $2400, and his wife’s PIA is only $1000.
PIA, or primary insured amount, is the monthly amount a retiree would get if he or she retires at the normal retirement age, currently 66. For every year earlier (later) that one retires, one would get 8% less (more.) The youngest one may retire is 62 and the oldest is 70.
I’ve found over the years that many people give very little thought to maximizing their social security income, and they jump at the first opportunity when they turn 62 to claim their benefit. But in so doing, they could be leaving nearly half a million dollars on the table.
Take John and Jane Doe for example. These are the names I’ve given the good doctor and his wife to hide their identities. They have three garden variety strategies and one optimal strategy for claiming social security income.
•Early: they both begin claiming benefits when they turn 62. If John passes away, Jane switches to survival benefits.
•Normal: they both begin claiming benefits when they turn 66. If John passes away, Jane switches to survival benefits.
•Delayed: they both begin claiming benefits when they turn 70. If John passes away, Jane switches to survival benefits.
•Optimal: John files for spousal benefit at 66; Jane begins benefit based on her own earning record at 62; John switches to his own benefits at 70; Jane adds spousal benefits at 66. If John passes away, Jane switches to survival benefits.
Let’s say John and Jane’s normal life expectancies are 85 and 90; short life expectancies are 75 and 80 and long life expectancies are 95 and 100. The table below shows how much they would get from social security under the four strategies and the three life expectancy scenarios..
Strategy
Short Life
Normal Life
Long Life
Early
$591k
$911k
$1.23mm
Normal
$589k
$1.01mm
$1.45mm
Delayed
$552k
$1.08mm
$1.62mm
Optimal
$650k
$1.14mm
$1.64mm
So you see, regardless of whether John and Jane live a long (or a short) life, the optimal strategy does better! If John and Jane live a long life, it’s $410k better!
Michael Zhuang
LikeLike