The Social Security Administration announced a 2.8 percent increase in benefits in 2019, the largest increase since 2012. The change will put an additional $468 annually in the pocket of the average retired beneficiary.
Cost of living increases are tied to the consumer price index, and an upturn in inflation rates and gas prices means recipients get a boost in 2019. The 2.8 percent increase is higher than last year’s .2 percent rise and the .3 percent increase in 2017. The average monthly benefit of $1,422 in 2018 will increase by $39 a month to $1,461 a month for an individual beneficiary, or $468 yearly. The cost of living change also affects the maximum amount of earnings subject to the Social Security tax, which will grow from $128,700 to $132,900.
Unlike last year's increase, the additional income should not be entirely eaten up by higher Medicare Part B premiums. The standard monthly premium for Medicare Part B enrollees will increase only $1.50 to $135.50.
For 2019, the monthly federal Supplemental Security Income (SSI) payment standard will be $771 for an individual and $1,157 for a couple.
Most beneficiaries will be able to find out their cost of living adjustment online by logging on to My Social Security.
Typically, we tend to review our estate plan when we get older or if there has been a significant change in our circumstances. However, if you are over the age 60 and you haven't updated your estate plan in many decades, it’s time to update your documents. After everything has been updated, you should review your plan every two and half years.
Here are a few age ranges and what they mean in terms of estate planning:
18-30 Everyone needs a durable power of attorney, health care proxy and HIPAA release so that you have people in place to make decisions in the event of incapacity.
30-40 Once you begin accumulating assets, get married, and/or have children, it's important to create an estate plan to care for your loved ones in the event of your death. It’s also a good time to update your durable power of attorney, health care proxy and HIPAA release, since the people you may have appointed at 18 (your parents?) may not be the people you want in these roles at 35.
40-60 Unless there's been a change in your circumstances, and assuming you have a good plan in place, you probably don't need to review your estate plan during your 40s and 50s.
60-70 Once you've hit your 60s, it's time to review everything again. Your marital situation may have changed, your children are probably grown, and you may have grandchildren. You probably have more investments and assets, you may have retired or are getting ready to, and the people you appointed to step in when you were 35 may no longer be able to assist. And, unfortunately, the chances of disability or death increase with every year.
70+ Now it's time to review your plan every five years or so. Changes happen -- to your health and that of your loved ones, to the tax laws, to the programs supporting long-term care or disability care. It's important to have a plan in place and to adjust it as circumstances change.
Change in Circumstances
While the timeline above outlines when you should review and perhaps update your estate plan, the following changes in circumstances also warrant a review of your plan to see if it still meets your goals and needs:
A Marriage. You're likely to want your assets to go to your spouse and to name him or her to be your agent in the event of incapacity.
A Divorce. Likewise, if you get divorced, you probably won't want your assets to go to your ex-spouse or to rely upon him or her to step in if you were to become incapacitated.
Children. Once you have children, you'll want to provide for them and to name someone to step in as guardian in the event of your death or incapacity and that of their other parent if applicable. Generally, once you have a plan in place you do not have to update it if you have more children.
A Disability. If you or someone who would inherit from you becomes disabled, you will need to plan to protect and manage your assets, whether for yourself or for your beneficiaries.
Wealth. If you accumulate assets that exceed the thresholds for state and federal estate taxes -- $11.4 million federally -- you may want to plan to reduce or eliminate such taxes.
A Move. If you move to a new state or country, it will be important to have your estate plan reviewed to make sure it works in the new jurisdiction.
In short, until you reach age 60 or 70, reviewing your estate plan every five years is probably not necessary unless you have a change in circumstances such as those listed above. However, if you're over 60 and haven't updated your estate plan in many years, now's the time.
Schedule an appointment today and we will walk you through all your options.