Changes Coming to Social Security and Medicare

A few months ago, we told our readers that experts had predicted Social Security checks would remain the same in 2017. In most years, a cost of living adjustment (COLA) is issued, but with inflation flat-lining near zero, it was forecast that a COLA would not be happening next year.

Well, we might have a small bit of good news: Since Social Security COLA is based on third-quarter numbers from the Consumer Price Index, and the Index is reporting a tiny degree of inflation, it looks like there will be a COLA for beneficiaries after all. The downside is that the adjustment will be quite small, estimated at 0.2 percent. While any increase in benefits is better than none, the upcoming COLA won’t amount to very much.

Meanwhile, some Medicare recipients will be seeing a significant change in their premiums. If you’re one of the estimated 30 percent who don’t have their premiums deducted from Social Security checks, or if you fall into one of the highest income brackets, your Medicare premiums will be increasing sharply. Watch your mail for a statement from Medicare, which will give you an exact figure.

For the other 70 percent of beneficiaries, Medicare premiums are also set to increase, but only slightly. The average increase in this group will amount to $2.70 per month.

The takeaway lesson here is this: Social Security checks usually (though not always) receive a bump in January, but the increase is not always very large. Meanwhile, Medicare premiums can and do increase each year, and the raise you receive from Social Security might or might not account for the difference. This underscores an important retirement planning lesson that we strive to teach all of our clients: You can’t count on Social Security to provide all of your retirement income, and you must have a plan to deal with the rising cost of living.

To discuss these issues in depth, call us to schedule an appointment. We can analyze your retirement income plan, and help you identify ways to establish a secure stream of income that hedges against rising medical costs and other expenses.