Whether you will soon be applying for Social Security, or are already receiving benefits, here’s what you need to know about what’s changing (and not changing) in 2016.
What’s Not Changing
No Cost-of-Living Increase: Because inflation was unchanged from the third quarter 2014 to the third quarter 2015, there will be no increase in benefit payments to current recipients in 2016.¹
Tax Cap Remains Unchanged: For workers, the cap on wages subject to Social Security withholding stays at $118,500.²
Earnings Limit: The amount that any Social Security recipient can receive in compensation without a reduction in his or her Social Security benefits remains unchanged from 2015 at $15,720 (under the full retirement age) and $41,880 (the year an individual reaches full retirement age).³
Medicare Part B Premium: Since the law prohibits Medicare premiums from rising faster than Social Security benefits, most retirees will see no increase in Part B premium costs. However, first-time enrollees in 2016 and high-income Medicare beneficiaries may pay a higher premium.
Better Customer Service: Look for online services to expand, self-service kiosks at field offices to increase and reduced wait-times for a hearing decision.
Benefit Maximization Strategies: The file-and-suspend and restricted application strategies that worked to maximize the income benefits from Social Security have been eliminated, though the law does provide some grandfather protections.
Elimination of Revoking Suspended Benefits: Individuals who filed for benefits and then suspended them to gain a future, higher payout previously had the flexibility to “un-suspend” benefits in the event of a life-threatening illness or change in financial circumstances and receive a retroactive lump sum payment. This flexibility will no longer exist.