The Social Security Administration released today the cost-of-living adjustment (COLA) for those receiving benefits will be 1.5% effective January 1st. While this is one of the smallest increases on record, following a 1.7% increase for 2013 and a 3.6% increase for 2012, it sure is better than the zero increase in benefits seen in both 2010 and 2011.
With this announcement, it bears recognizing that there can be complexities to Social Security and retirement planning. For example:
- A person electing to receive benefits prior to their Full Retirement Age must be mindful that their Social Security benefits may be reduced if they are still working and have earnings above a specified threshold ($15,120 for 2013).
- If a person is eligible for a benefit that is less than half that of their higher earning spouse, that person can generally receive a spousal benefit that increases their benefit to 50% of that of their spouse.
- Divorcees who were married for more than 10 years can be eligible for benefits based on their ex-spouse’s earnings record.
- Widows and widowers may be eligible for Social Security retirement benefits based on their deceased spouse’s earnings as early as their age 60.
- Widows and widowers may be able to initially receive retirement benefits based on their deceased spouse’s earnings, and later change to a higher retirement benefit based on their own earnings record.
- Married couples may be able to initially take a spousal benefit equal to 50% of their partner, and later change to their own, higher benefit after allowing for delayed retirement credits.
The Social Security website can be an excellent planning resource. The Links page on our website includes a link to the section of the SSA website where a person can login and secure personalized information about their own benefits, including a copy of their most recent Social Security Statement.
Social Security is an important part of planning for retirement, and we’re happy to assist clients in understanding their options as part of planning around the “big picture.”