Compliance October 11, 2018

Social Security Benefits to Increase 2.8% in 2019

This is in keeping with a rise in the DOL’s Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).

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Social Security and Supplemental Security Income (SSI) benefits will increase by 2.8% in 2019, the Social Security Administration announced. This is in keeping with an increase in the cost of living, as measured by the Department of Labor (DOL)’s Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). Federal law requires the Social Security Administration to make cost of living adjustments (COLA) tied to this index.

As a result, more than 67 million Americans will see their Social Security and SSI benefits rise in the coming year.

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In addition, the maximum amount of earnings subject to the Social Security payroll tax and the retirement earnings tax exemption amount will change for 2019. The taxable maximum will increase to $132,900. The earnings limit for people born in 1943 through 1954 will increase to $17,640, with $1 of benefits deducted for each $2 earned over $17,640. The earnings limit for people turning 66 in 2019 will increase to $46,920, and the administration will deduct $1 from benefits for each $3 earned over this amount until the month the worker turns age 66. There is no limit on earnings for workers who are at full retirement age, i.e. 66 or older for the entire year.

Americans will be able to see how their benefits are impacted in December, when the administration will post Social Security COLA notices online for retirement, survivors and disability beneficiaries who have a Social Security account.

Beneficiaries can opt to continue receiving their COLA notices by mail or online.

Data & Research October 10, 2018

More Actions Needed to Secure Financial Future for Those Retired and Not

The 2018 Retirement in America Survey from First National Bank of Omaha found 69% of people not yet retired have not calculated how much money they will need for retirement, while debt is plaguing retirees.

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A survey of 1,000 Americans ages 18 and older would indicate that many are not doing enough to secure their financial future.

The 2018 Retirement in America Survey from First National Bank of Omaha found 38% of people who have yet to retire have not started saving for retirement. In addition, 69% have not calculated how much money they will need for retirement, while 65% prioritize getting out of debt over investing for retirement.

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Specifically, 38% of people who have yet to retire said they do not regularly contribute to a 401(k) or IRA, while 37% contribute to a 401(k) only, 8% to an IRA only and 17% to both. In addition, 18% of retirees said they do not have an investment portfolio. Of those that do, 22% check their investment portfolio monthly, 19% quarterly, 14% weekly, 13% daily, 7% yearly, 2% every few years and 4% never.

Debt affects many retired Americans. The survey found 37% of retirees are still paying off a mortgage, 29% are paying off auto loans, 15% are paying off medical debt and 8% are paying student debt.

And, fear of the stock market is affecting many of those not yet retired. Nearly half (48%) of survey respondents who have yet to retire indicated they believe it’s likely there will be another recession within the next five years, and 14% have gone as far as to take their money out of the stock market because of this.

Interestingly, the survey found 19% of retirees were older than 50 when they started saving for retirement, while 35% were younger than 30, 30% were between 30 and 40 and 16% were between 41 and 50.

The most popular way for retirees to stay informed about matters related to retirement is their financial adviser (43%). For people who have yet to retire, it is online research (43%).

“Many Americans—retirees themselves as well as people who have yet to retire—are not taking all the steps they can that will ultimately allow them to make the most of their golden years,” says David Janus, senior vice president, wealth management, First National Bank of Omaha.

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