A Look Ahead at Social Security
Will Social Security be there for you when you’re ready to retire? Most Americans are concerned about the future of Social Security. The problem is simple—the lifespan of the average American increased and therefore outpaced workers’ contributions into the system. When Social Security was enacted in the 1930s, life expectancies were much shorter than they are today. Now, with people living longer, there are more Social Security recipients than ever imagined.
With the uncertainty of Social Security reform, you will most likely need to supplement your Social Security benefits with assets from a retirement plan and personal savings in order to fund your retirement. Let’s take a closer look at some of the recent updates to Social Security that may affect your future benefit.
Social Security’s full retirement age is changing. For those born prior to 1938, the age for receiving full benefits was 65. For those born between 1938 and 1959, full retirement age rises incrementally until, for those born in 1960 and later, the full retirement age is 67.
In 2013, the maximum amount in earnings on which workers pay Social Security taxes is $113,700. The Social Security benefit for someone retiring at full retirement age effective as of January of 2013 is $2,533 a month, or $30,396 a year. Those who are under full retirement age, working and receiving Social Security benefits will lose $1 in benefits for every $2 earned above the annual limit of $15,120, or $1,260 monthly. In addition, $1 out of $3 will be deducted in the year you reach full retirement age for earnings above the annual limit of $40,080 or $3,340 monthly. This deduction is taken only in the months before you reach full retirement age, and beginning the month that age is reached, there are no earnings restrictions affecting full benefits.
Note that as of April 2011, the SSA stopped mailing out annual estimated benefit statements to workers under age 60 and retirees already receiving benefits as a fiscal restraint measure. To receive an estimate of your projected payments, you can go to the SSA’s website at www.ssa.gov.
Retirement planning is ultimately your responsibility and essential to your financial and personal well-being. Be sure to conduct a thorough assessment of your income resources, including Social Security benefits, so you can better plan for the lifestyle you envision in retirement. If you need assistance, consult a qualified professional for specific guidance.
The information contained in this article is for general use and while we believe all in formation to be reliable and accurate, it is important to remember individual situations may be entirely different. Therefore, information should be relied upon only when coordinated with professional tax and financial advice. Neither the information presented nor any opinion expressed constitutes a representation by us or a solicitation of the purchase or sale of any insurance or securities products and services. Written and published by Liberty Publishing, Inc. Copyright © 2013 Liberty Publishing, Inc. SOCSEC3-04
The information provided is not written or intended as specific tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. MassMutual, its employees and representatives are not authorized to give tax or legal advice. Individuals are encouraged to seek advice from their own tax or legal counsel.
Insurance products issued by Massachusetts Mutual Life Insurance Company (MassMutual), Springfield, MA 01111-0001.
