Do You Receive Social Security? 6 Changes in 2020

  • Estate Planning
Do You Receive Social Security? 6 Changes in 2020 | Mario Godoy | Lombard Estate Planning Lawyer

Social Security Income (SSI) beneficiaries and future beneficiaries will see 6 changes in 2020.

1. 1.6% Cost-Of-Living (COLA) Adjustment
On December 31, 2019, over 8 million SSI recipients received a cost-of-living increase. The average monthly benefit for all retired workers rose from $1,479 to $1,503. The average monthly benefit for couples who both receive benefits rose from $2,491 to $2,531. In 2019, SSI recipients received a 2.8% increase.

The new SECURE Act pushes back the age at which retirement plan participants need to take required minimum distributions (RMDs) from 70½ to 72. Retirement account owners who pass away in 2020 and after’s beneficiaries will have only 10 years to empty the account.

3. Increase in Earnings Subject to Social Security Tax
The maximum amount of earnings subject to the Social Security tax will increase from $132,900 in 2019 to $137,700 in 2020. 7% of workers will have to pay approximately $298 more of their wages into Social Security in 2020 than in 2019.

4. Tax Increase on Social Security Benefits
56% of Americans pay taxes on their SSI. Because the SSI taxable income threshold is not adjusted for inflation, more people will end up paying taxes on their SSI income.

5. Workers’ Benefits Decrease 
In 2020 the Social Security Administration (SSA) will deduct $1 from benefits for each $2 earned over $18,240 for anyone below Full Retirement Age (FRA).

6. Medicare Premiums and SSI
Medicare Part B premiums will increase in 2020. The hold harmless provision prevents individuals from having their Social Security benefits reduced because of higher Medicare premiums.

Learn More: 4 changes coming to Social Security in 2020

Meeting with an estate planning attorney helps you prepare for the unknown and the unexpected. Though it may be tempting to put off, creating an estate plan can help prevent serious issues down the road. When you work with an attorney to decide what will happen to your assets after you die, they can create an estate plan that gives you peace of mind today. To talk to an estate and probate attorney contact the Estate & Probate Legal Group in Lombard Illinois at 630-800-0112.