SOCIAL SECURITY AND MEDICARE UPDATE

The annual inflation adjustments have been announced for the various social security amounts and thresholds, so we thought it would be a good time to update you for 2014.

For social security beneficiaries under the full retirement age, the annual exempt amount increases to $15,480 in 2014, up from $15,120 in 2013.  These beneficiaries will be subject to a $1 reduction in benefits for each $2 they earn in excess of $15,480 in 2014.  However, in the year beneficiaries reach their full retirement age, earnings above a different annual exempt amount apply.  Earnings greater than $41,400 in 2014 (up from $40,080 in 2013) are subject to a $1 reduction in benefits for each $3 earned over this exempt amount.  Social Security benefits are not reduced by earned income beginning with the month the beneficiary reaches full benefit retirement age.  But remember, social security benefits received may be subject to federal income tax.

The Social Security Administration estimates the average retired worker will receive $1,294 monthly in 2014.  The average monthly benefit for an aged couple where both are receiving monthly benefits is $2,111.  These amounts reflect a 1.5% cost of living adjustment (COLA).

The maximum 2014 social security benefit or a worker retiring at full retirement age is $2,642 per month, up from $2,533 in 2013.