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What You Need to Know About Social Security in 2019

OntheHouseWhether or not you have filed for Social Security benefits, every Boomer should be aware of how Social Security operates. The best source of information is the SSA, the Social Security Administration (www.ssa.gov). There you will find everything you need to know about how and when to apply for benefits.

Boomers tend to have a lengthy work history, which generally means monthly benefit amounts will be higher. According to the SSA, to qualify for benefits in general, an individual must work for at least ten years while earning at least $5,280 per year. However, benefit amounts are also affected by the age at which you start to draw Social Security.

You should be aware of the three most important ages as far as Social Security is concerned:

  1. Age 62 - This is the earliest you can draw Social Security, but the benefit amount will be reduced.
  2. "Full retirement age" - This is the age at which you receive full Social Security benefits. If you were born between 1943 and 1954, that age is 66. After 1954, that age is 67.
  3. Age 70 - This is the age at which Social Security benefits reach the maximum amount. Between your "full retirement age" and age 70, your monthly benefit may increase the longer you wait to draw Social Security.

Also, you can still draw Social Security while you are working if you are age 62 or older.

As you can see, drawing Social Security is a financial decision that should be carefully considered, ideally with the help of a financial advisor.

Most Boomers know that Social Security is completely different from Medicare, a government-funded health insurance program that covers individuals age 65 and over. The inter-relationship with Social Security is simply that Medicare payments can be automatically deducted from Social Security benefits.

There are some important changes to Social Security coming in 2019.

  1. The good news is that there will be Cost of Living Adjustment (often called "COLA") to the monthly benefit payment of 2.8 percent beginning in January 2019. That may not sound like much, but the COLA has been next to nothing for many years, so it is a marked improvement.
  2. If you are still working between the ages of 62 and your full retirement age, you can still draw Social Security benefits; however, if you earn more than $17,640 per year during that time, the SSA will deduct $1 for every $2 you earn from your monthly benefit. The year that you reach full retirement age, the SSA will deduct $1 for every $3 you earn from your monthly benefit if you earn $46,920 in that year. Once you reach your full retirement age, you can earn any amount without reducing your Social Security benefit.
  3. During your earning years, Social Security tax was deducted from your paycheck on earnings up to $128,400 annually. If you made more than that per year, you were only taxed for Social Security purposes on that amount. In 2019, Social Security tax will apply on earnings up to $132,900.
  4. Supplemental Security Income (SSI), which is available to those with special conditions (blind and disabilities, for example) will also see a modest increase.

The SSA now offers anyone the ability to set up a personal online account with two-factor security authentication. Once you set it up, you can get personalized information about your potential or actual Social Security benefit and interact with SSA as necessary. Check it out here: https://www.ssa.gov/myaccount/


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