Social Security and Medicare Changes Under New COLA

View this article online at https://www.fedsmith.com/2013/10/30/social-security-and-medicare-changes-under-new-cola/ and visit FedSmith.com to sign up for free news updates
By on October 30, 2013 in Current Events, Retirement with 0 Comments

The cost-of-living adjustment for Social Security recipients, CSRS retirees and FERS retirees (other than special category employees) age 62 or older will be 1.5%.  Social Security changes for 2014 follow:

2013 2014
Amount of income out of which SS payroll taxes are taken $113,700 $117,000
Amount needed to earn a quarter of coverage (credit) $1,160 $1,200
Earnings test from age 62 until the year full retirement age is reached $15,120 $15,480
Earnings test in year full retirement age is reached $40,080 $41,400
Substantial gainful activity for disability recipient $1,040 $1,070

Medicare changes:

Part A deductible – $1,216 per benefit period

Part A co-pays:

Days 61 – 90 – $304 per day

60 lifetime reserve days – $608 per day

Part B deductible – $ 147 per year

Part B premium – $104.90 per month (may be higher for high income individuals)

Skilled nursing co-pay for over 20 days – $152 per day.

IRS has not yet announced whether or not there will be any changes in the elective deferral limit for the TSP or the contribution limits for IRAs.  Neither have they updated income restrictions on deducting one’s contributions to a traditional IRA, or in being able to contribute to a Roth IRA.  It is expected that they will announce any changes soon.

OPM has not yet announced the changes in inflation indexed benefits that will result from the COLA.  It is not expected that they will announce changes anytime soon.  In fact, they usually delay several months before they announce those changes.  I think that we can be safe if we multiply last year’s numbers by 1.015.  Knowing that I may be off by a dollar or so, I predict that the OPM changes will be:

  • Children’s Survivor Benefits
    • With one living parent, the lesser of:
      • $501 per month per child; or
      • $1506 per month divided by the number of eligible children.
    • With no living parent, the lesser of:
      • $602 per month per child; of
      • $1808 per month divided by the number of eligible children.
  • FERS lump-sum death benefit (fixed amount):
    • $31, 786.21

Agencies can request to have John Grobe, or another of Federal Career Experts' qualified instructors, deliver a retirement or transition seminar to their employees. FCE instructors are not financial advisers and will not sell or recommend financial products to class participants. Agency Benefits Officers can contact John Grobe at [email protected] to discuss schedules and costs.

© 2020 John Grobe. All rights reserved. This article may not be reproduced without express written consent from John Grobe.

Tags:

About the Author

John Grobe is President of Federal Career Experts, a firm that provides pre-retirement training and seminars to a wide variety of federal agencies. FCE’s instructors are all retired federal retirement specialists who educate class participants on the ins and outs of federal retirement and benefits; there is never an attempt to influence participants to invest a certain way, or to purchase any financial products. John and FCE specialize in retirement for special category employees, such as law enforcement officers.

Top