Data recently released from the Social Security Board of Trustees indicates there may be no 2016 cost-of-living adjustments (or COLA) to benefits.
Now, the official announcement will be made by Social Security in October…after 3rd quarter 2015 data is available. This data for the COLA calculation is based on increases in the CPI-W (or the Consumer Price Index for urban wage earners)…ending after the 3rd quarter of each calendar year.
For those enrolled in Medicare, Part B premiums are currently estimated to increase in 2016. However, there is a provision for most individuals that will keep their Part B premiums at about $105/month. Without this provision, individuals in some years (perhaps like 2016) would receive a net decrease in Social Security benefits….because gross benefits would stay the same while Medicare premiums (deducted from Social Security income) would increase. However, this exception does not apply to those with “high income.”
So couples with MAGI above $170,000 (or singles with MAGI above $85,000) may likely see a net decrease in Social Security benefits in 2016. Again, we won’t know for certain until this fall.
These current events are complex and ever changing. It is wise to work with a team of experienced professionals to help you make wise decisions today and in the future.
Published: August 21, 2015
Authored by: Josh Wichman, MBA
Direct Phone: 812-602-6319
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