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Planning To Retire In 2016? Here's What You Need To Know

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Planning To Retire In 2016? Here's What You Need To Know

If you are among those planning to retire in the New Year, there are a few things you should know now. While it is impossible to determine exactly how many people will retire in any given year, it is possible to note trends across the aging demographics.

Although the average age of retirement has shifted over the last decade as many worry about the probability and longevity of sustainable social security benefits, each year, the number of Americans pulling SS benefits increases.

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Source: SSA.gov

For 2016, there are two major categories of changes about to happen at the federal level that will affect you: myRA and SS changes.

MyRA

This new flavor of Roth retirement account will provide retirees with another savings option. MyRA officially launched in late 2015, but the publicity of the account has been rather lackluster.

What you need to know:

  • No Fees.
  • Guaranteed by the government: It will never lose value, according to the government.
  • Investing option is limited to Treasury savings bond.
    • This bond has averaged 3.19 percent across the last decade.
    • Interest is not taxed as long as it is in the account.
    • Interest is not taxed at all if the account is left until holder is 59.5 years old.

  • Contributions are limited to $5,500 per year (for individuals earning $130,999.99 or below; for couples earning $192,999.99 or below).
  • Holders over the age of 50 can contribute an additional $1,000 annually.
  • After 30 years (or a balance of $15,000), the money is transferred to a private sector Roth.
  • According to U.S. Treasury Secretary Jacob Lew, "MyRA is designed to remove common barriers to saving and give people an easy way to get started."

    Social Security Benefits In 2016

    Of the largest changes SS beneficiaries can expect to see in the coming year, claiming options are among the most substantial. Each year, Social Security changes may arise, so it is important for retirees to be aware of what the government has in store and prepare accordingly.

    What you need to know:

  • Claiming SS twice will be abolished.
  • Some people may experience higher Medicare Part B premiums.
  • Suspended payment rules will become increasingly stricter.
  • You can benefit from a bigger saver's credit threshold.
  • There will be no payment increases.
  • No changes will be made to the tax cap; it will remain at $118,500.
  • There will also be no changes to the earnings limit.
  • The max possible SS payment will decrease from $2,663 last year to the new monthly maximum of $2,639.
  • The SS Administration is making changes to benefit you: longer office hours and more online services will be offered in 2016.
  • While Social Security benefits won't get larger in the New Year, there are changes ahead. It is important to be aware of how the government will move in the coming year, so that you can make adequate preparations.

    Talk with your personal advisor today about how these changes are likely to affect you and your family as you move closer to retirement. Through education and preparation, you can help dictate your financial future. Through action, you gain control. Act today, enjoy tomorrow.

    Image Credit: Public Domain

    Posted-In: Budgeting Jacob Lew myRA retirementEducation Top Stories Personal Finance General

     

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