The Social Security Administration (“SSA”) recently has reported that there will be no cost of living adjustment in 2016 for Social Security recipients. Their reasoning being that the cost of living has increased, so one’s 2016 dollar will be the same as it was for 2015.
As a Social Security recipient, I disagree. Even though the price at the pump has decreased, my household has received significant increases in the cost for groceries, medical care and housing costs including real estate taxes. I personally see, and fell, these increases in my personal budget. It makes it difficult to accept SSA’s assertion of no inflation in 2015.
SSA also announced that associated figures will also stay the same in 2016. That is, there will be no increase in the maximum amount of earnings recipients are allowed without impact to their Social Security income, and the amount of income current employees and employers pay Social Security taxes on also will not change. The maximum taxable income for Social Security remains at 118,500 per wage earner. The maximum a Social Security recipient under full retirement age can earn without incurring a penalty stays at $15,720 annually. The Social Security tax for 2016 will remain at 7.6%.
Though this is not a “good news” report, it is important for those of us receiving Social Security benefits to be aware of what we can expect to continue to receive in 2016. Our belts will need to be strapped a little tighter, but with some planning, we will continue to enjoy our retirement!
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This blog should be used for informational purposes only. It does not create an attorney-client relationship with any reader and should not be construed as legal advice. If you need legal advice, please contact an attorney in your community who can assess the specifics of your situation.