Retirement

How Will Social Security Change In 2017

There are some projected changes that are expected on Social Security benefits in 2017. According to U.S news on the 22nd of June 2016, the average recipient of Social Security benefits will receive a little increase of 0.2% in 2017.

Social Security changes in 2017

According to trustees who are in charge of the nation’s entitlement programs, Social Security cost-of-living-adjustment (COLA) is expected to increase with 0.2% and this is purely based on “intermediate assumptions”.

social security benefits

The 0.2% increase in Social Security benefits will be an extra $2 dollars for a retiree who was once collecting $1000 every month. This increase will come because for the third time in four decades, workers got no increase in their benefits as was expected in 2016. However, the final COLA figures will come later.

Another projection by the trustees is on Medicare’s Hospital Insurance trust fund which is expected to run out of money early than the time predicted. Medicare insurance trust fund was formally estimated to run out of money in 2030 but from the recent findings and projections, in 2028, the funds will finish.

As a result of the projections of the lack of fund in Medicare Hospital Insurance trust fund, in 2017, the estimated average monthly premium for Medicare Part B in 2017 will be $149 way higher than $104.90 paid in 2015 and $121.80 paid in 2016. According to health insurance report, 70% enrollee’s in the part B Medicare will be able to avoid the portion of the monthly premium increase that is above their Social Security benefit increase.

In more disturbing news, the trustees said that some Medicare beneficiaries may face sharply higher “Part B” monthly premiums for outpatient care next year. According to the law, increases in premiums for most Medicare recipients cannot exceed their increase in Social Security payments therefore about 70 percent will not be affected but the remaining 30 percent of beneficiaries are not covered by this.

Those who will mainly feel the impact of the depleted fund are the new beneficiaries and people who earn higher incomes. The trustees project that the monthly premium for this group of individuals will increase by about $27, to $149. Upper-income beneficiaries are expected to pay more.

However, officials warned that next year’s premiums projections are still very uncertain and the final numbers will be released in the fall. According to their report, the actual future costs for Medicare may be more than the projections shown presently.

According to USA news, the government spent $648 billion on Medicare alone in 2015, and this represent 3.6% of the nation’s gross domestic product. That figure is however projected to grow to 5.6% by 2040, mainly because of the aging population.

Commenting on this figure, U.S. Treasury Secretary Jack Lew said they “show that the U.S government has some time to address the fiscal challenges faced by the vitally important Trust Fund programs” He further stated that “Congress should not wait until the eleventh hour to address the fiscal challenges given that they represent the cornerstone of economic security for seniors in our country.”

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