Social Security Payments to Increase, but…
Beginning in 2013 recipients of Social Security payments will see their first increase in three years. The increase is a mere 1.7%, or about $21 extra dollars per month for the majority of people.
At the same time the temporary Medicare income tax cut ends, which will raise every workers Medicare payroll tax deduction from 4.2% to 6.2%. The earnings cap will also increase $3,600 in 2013, meaning you’ll continue to have Medicare deductions from your weekly paycheck for a few additional paydays if you earn that much - $113,700. With nearly three million American workers that’s a lot of additional revenue by my calculations.
Working recipients will get a small break, as they can earn and extra $480 dollars per year before being penalized at the rate of one dollar for every two dollars they earn. My thoughts here are; one, why should retired people have to work, and two, if they are retired and work why do they have to continue to pay into the system?
Another change is the standardization of Medicare Part B premiums. In the past there were three different methods to calculate how much a person had to pay for their Part B coverage. Beginning this year with all premiums the same, a few people will actually see a few more dollars on their monthly check.
Unfortunately most of the raise will be spent due to increased premiums, deductibles and co-pays. Part A premiums raise $5, Part B premiums raise $7, and the hospitalization deductible raises $28. The only good news here is that these raises are less than originally planned, as the Part B premium was at one time scheduled to rise to $247 under the government health care bill. I’m happy that our congress changed that!
However the year is just beginning, and with the country looming on the fiscal cliff cuts are being discussed that could change all of this.
Until next time, hope all your “Thoughts” are Good-