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Oct 19
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2017 Social Security Benefits Increase

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Social Security Cost of Living Adjustment Announced

retirement benefits

retirement benefits

The annual cost-of-living adjustment (COLA) usually means an increase in the benefit amount people receive each month. By law, the monthly Social Security and Supplemental Security Income (SSI) federal benefit rate increases when there is a rise in the cost of living.

 

The government measures changes in the cost of living through the Department of Labor’s Consumer Price Index (CPI-W). The CPI-W rose this year. When inflation increases, your cost of living also goes up. Prices for goods and services, on average, are a little more expensive. Since the CPI-W did rise, the law increases benefits to help offset inflation.

As a result, monthly Social Security and SSI benefits for over 65 million Americans will increase 0.3 percent in 2017.

Social Security Wage Base Increases to $127,200 for 2017

Other changes that would normally take effect based on changes in the national average wage index will begin in January 2017. For example, the maximum amount of earnings subject to the Social Security payroll tax will increase to $127,200.

The Federal Insurance Contributions Act (FICA) imposes two taxes on employers, employees, and self-employed workers-one for Old Age, Survivors and Disability Insurance (OASDI; commonly known as the Social Security tax), and the other for Hospital Insurance (HI; commonly known as the Medicare tax).

For 2017, the FICA tax rate for employers is 7.65%-6.2% for OASDI and 1.45% for HI.

For 2017, an employee will pay:

  • (a)  2% Social Security tax on the first $127,200 of wages (maximum tax is $7,886.40 [6.2% of $127,200]), plus
  • (b)  45% Medicare tax on the first $200,000 of wages ($250,000 for joint returns; $125,000 for married taxpayers filing a separate return), plus
  • (c)  35% Medicare tax (regular 1.45% Medicare tax + 0.9% additional Medicare tax) on all wages in excess of $200,000 ($250,000 for joint returns; $125,000 for married taxpayers filing a separate return).

For 2017, the self-employment tax imposed on self-employed people is:

  • 4% OASDI on the first $127,200 of self-employment income, for a maximum tax of $15,772.80 (12.40% of $127,200); plus
  • 90% Medicare tax on the first $200,000 of self-employment income ($250,000 of combined self-employment income on a joint return, $125,000 on a separate return), plus
  • 8% (2.90% regular Medicare tax + 0.9% additional Medicare tax) on all self-employment income in excess of $200,000 ($250,000 of combined self-employment income on a joint return, $125,000 for married taxpayers filing a separate return).

There is a maximum amount of compensation subject to the OASDI tax, but no maximum for HI.

Note: On a salary of $127,200 (or more), an employee and his employer each will pay $7,886.40 in Social Security tax in 2017.

Note: A self-employed person with at least $127,200 in net self-employment earnings will pay $15,772.80 for the Social Security part of the self-employment tax in 2016.

Note: Self-employed workers deduct half of their self-employment tax above-the-line in arriving at adjusted gross income.

Information about Medicare changes for 2017, when announced, will be available at www.Medicare.gov. For some beneficiaries, their Social Security increase may be partially or completely offset by increases in Medicare premiums.

Want to discuss how this impacts you and your retirement planning? Contact us for a free consultation.

Matt Leonard

Jul 20
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Veterans Benefits Increase in 2017

By Uncategorized

Veterans Will See Same Cost-of-Living Hike As Social Security in 2017

Veterans’ benefits will match the Social Security cost-of-living increase in 2017, thanks to a measure recently finalized by Congress this week. But Veterans’ groups hoping for a more permanent answer to the annual legislative hand-wringing over their benefits boost will have to wait longer for that solution.
 
Under law, annual cost-of-living increases are automatic for Social Security benefits, determined by the executive branch without intervention from Congress. But Veterans’ benefits fall into a different category, one that requires lawmakers to vote on an adjustment every year.
veteran-benefits
In the last few decades, Veterans have seen their annual adjustment differ from the Social Security COLA only one time (in 2000, as a result of a minor rounding difference between the two rates). But outside groups have called having the two increases dealt with separately confusing at best and potentially ripe for abuse or mistakes.
The measure finalized by the Senate links the Veterans’ benefits boost to Social Security rates for 2017 alone. Legislation to permanently tie veterans payouts to the Social Security cost-of-living calculations was passed by the House in February, but has languished in the Senate since then. Bill sponsor Rep. Ralph Abraham, R-La., said he is still hopeful that measure can advance through Congress later this year.

The change affects the annual rates of VA disability compensation, dependency compensation for surviving children and spouses, and medical clothing allowances for veterans, among other benefits.

It will not affect adjustments for military retirement pay, which are calculated through other methods.

Social Security and veterans benefits did not see a cost-of-living increase in 2016, due to lower inflation costs and the methodology used by government officials to calculate the raise. No announcements have been made on a possible 2017 social security increase which the veterans benefits are tied to.

Source: Military Times

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Jun 29
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Cost of Rhode Island Long-Term Care Services Increase

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The cost to receive long-term care services at home with a health aide has increased in Rhode Island, according to Genworth’s 13th annual Cost of Care Study.

The cost to receive long-term care services at home with a health aide has increased both in Rhode Island and nationally, according to Genworth’s 13th annual Cost of Care Study.

Released Tuesday, the study said long-term care costs across all care settings in Rhode Island, including home care, adult day services, assisted living and nursing facilities, are higher than last year.

“Although home care costs are much less expensive than those in facility-based settings, the costs can add up to as much as $57,200 per year in Rhode Island, which is why it’s imperative for consumers to begin planning now for how they will pay for that care should they need it,” Tom McInerney, president and CEO at Genworth, said in a statement.

He said at least 70 percent of Americans over age 65 will need some form of long-term care services and support during their lives.

In Rhode Island, the median monthly cost of a home health aide is $4,767, a 0.48 percent increase from 2015. That’s also higher than the national median monthly cost of $3,861, which also increased in cost over the year by 1.3 percent.

The cost of adult day services in Rhode Island rose 12.8 percent, for a median monthly cost of $1,625. That compares with the national median monthly cost of $1,473, which fell 1.3 percent over the year.Monthly Cost Chart 2016

Median monthly private nursing home costs also rose in the Ocean State, to $9,581, an 11.5 percent increase, as well as semi-private nursing home costs, which rose to $8,304, a 7.1 percent increase. Annually, the cost for private nursing home care amounts to $114,975, which has increased 2 percent over the last five years. That is also higher than the national cost for private nursing home care at approximately $92,000.

Nationally, the monthly median cost for a private nursing home rose 1.2 percent to $7,698, and semi-private nursing home costs climbed 2.3 percent to $6,844.

Two services that declined over the year in Rhode Island were homemaker services and assisted living, by 2.1 percent and 7.4 percent, respectively, for totals of $4,385 and $4,931 per month. Nationally, those segments increased 2.6 percent to $3,813, and 0.8 percent to $3,628, respectively.

Other report findings:

  • The cost of semi-private nursing home care is 11.72 percent more expensive in the Providence-Warwick-Fall River metropolitan area than the state average at $9,277 per month.
  • The cost of adult day services is 6.65 percent less expensive in the Providence metro area than the state average, at $1,517 per month.
  • Homemaker services costs are 1.1 percent less expensive in the Providence metro area than the state average, at $4,338 per month.

A home health aide will typically help with bathing, dressing, transferring and toileting, but not with catheters or injections. Most agencies also provide homemaker services that typically include assistance with shopping, finances, cooking, errands and transportation. Homemaker services may also be employed for the purpose of providing companionship.

“The annual Cost of Care study is our way of helping Americans fully understand the financial implications of long-term care so that they can plan ahead and, when the time comes, focus on getting the best care without the worry and stress of how they’re going to pay for it,” McInerney said.

The 2016 Cost of Care Survey covers more than 15,000 long-term care providers in 440 regions throughout all 50 states, including all U.S. metropolitan statistical areas.

Source: Providence Business News

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