Retirement Benefits Will Change In ’15

There will be important changes to Social Security, Medicare, Individual Retirement Accounts and 401(k)s starting next year.

Here are the new features your retirement benefits will have. Go to artofthinkings-mart.com/tax for more information.

• Social Security: Recipients will see a 1.7 percent increase next year for the annual cost-of-living adjustment.

For those working, you will still be paying 6.2 percent of your income, but the maximum amount taxable will go up to $118,500 in 2015 from $117,000 this year.

Also, if you haven’t created an online account, the Social Security Administration will send statements to those who are still working at certain ages. The amount you can earn before your Social Security benefits are withheld also will go up from $1,290 a month to $1,310 a month in 2015. One dollar in benefits is withheld for every $2 you earn over this limit for those who are not over full retirement age and collecting benefits. Visit artofthinkings-mart.com/go/ss for more important Social Security information.

• Medicare: Both the standard Medicare Part B premium ($104.90 per month) and deductible ($147 per year) will remain unchanged, with the exception of high-income beneficiaries, who will pay more.

The Medicare Part A hospital inpatient deductible will be $1,260 in 2015 from $1,216 this year, and the Medicare Part D premiums, even though there are different plans, are expected to increase by 4 percent to an average of $38.83 next year.

During open enrollment, you should check to see how your current plan, premiums, deductibles and costs will change starting in 2015. You will have an opportunity to switch Part D plans during your annual open enrollment.

• Individual Retirement Accounts (IRA): The maximum contribution limit will stay the same at $5,500 ($6,500 for those over 50) but the income limits for the Roth and the tax deduction limits for the Traditional will increase. Go to artofthinkingsmart.com/tax for the new limits for singles and couples.

• 401(k): The maximum amount will increase by $500 to $18,000 ($24,000 for those over 50). This includes 403(b)s, 457s, and the federal government’s Thrift Savings Plan (TSP).

• myRA: Beginning late this year, the Treasury will offer myRA, a new type of retirement account. It is guaranteed by the government to never lose value (earns interest at the same rate as the government securities fund for federal employees) and deposits are made through payroll deduction. The initial deposit can be as little as $25, with direct deposits of $5 for each paycheck.

myRA was created for lowand middle-income Americans who currently don’t have a plan. myRA is for individuals with an annual income of less than $129,000, or $191,000 for married couples.

This is a Roth account, with the same benefits and limits per year, and is portable if you change jobs. There are no fees, but the account can only have a maximum account balance of $15,000 or a balance below the maximum for up to 30 years. At any time individuals can transfer their myRA account into a private-sector Roth account.

david@artofthinkingsmart.com