Are you getting ready for retirement in 2014? Here are some official retirement planning numbers that every 2014 retiree should know:
Limits on earnings from employment. If you plan to retire before Social Security full retirement age, which is 66 for people born between 1943 and 1954, you can't earn more than $15,480 a year from employment without losing $1 in benefits for every $2 you earn. The year you reach full retirement age, the limit on earnings before your actual birth date rises to $41,400. After the month you reach full retirement age, there is no limit on how much you can make while collecting Social Security checks.
Average Social Security earnings. The average retired worker in 2014 will get $1,294 and the average couple will receive $2,111. The maximum that a worker retiring at full retirement age can get from Social Security is $2,642, but workers who postpone retirement past full retirement age get an 8 percent bonus for every year they delay. That means a worker reaching age 70 in 2014 who had steady earnings at the maximum level since age 22 can get a monthly maximum of $3,425, according to the Social Security website.
The price of Medicare. Medicare Part A hospitalization doesn't cost anything for most people, but there are fees for Part B, which covers doctor bills and other services. What you pay depends on how much money you earn.
- Single persons earning $85,000 or less, and married couples filing jointly earning $170,000 or less, each pay $104.90 per month. Usually this gets deducted directly from your Social Security check.
- A single person earning from $85,000 up to $107,000, and married couples making frm $170,000 up to $214,000 will pay $146.90 per person per month.
- Single earners making from $107,000 up to $160,000 and couples making $214,000 up to $320,000 each pay $209.80 per month.
- Single earners making above $160,000 up to $214,000 and joint filers earning above $320,000 up to $428,000 each pay $272.70.
- Single filers making more than $214,000 and couples earning above $428,000 each pay $335.70.
There also are fees for Part D prescription drug coverage and penalties for people earning more than $85,000 or $170,000 as a couple. Here's the breakdown:
- Single people earning $85,000 or less and married spouses filing jointly who earn $170,000 or less pay only the Part D plan premium, which varies based on the plan they choose.
- Single people earning from $85,000 up to $107,000 and couples making from $170,000 up to $214,000 will each pay $12.10 per month plus the plan premiums.
- Single earners above $107,000 up to $160,000 and couples making $214,000 up to $320,000 pay $31.10 per month each plus their plan premiums.
- Single earners making above $160,000 up to $214,000 and joint filers earning above $320,000 up to $428,000 each pay $50.20 plus the plan premiums.
- Single filers making more than $214,000 and couples earning above $428,000 each pay $69.30 plus their plan premiums.
Lots of people are shocked when their first Social Security check arrives and they see that it doesn't go nearly as far as they had hoped. If you earn less than the federal poverty level -- about $958 a month for an individual or $1,293 for a couple -- you'll be eligible for both Medicare and Medicaid. The government calls these people "dual eligibles." You can make more than this and still be eligible for Medicaid or other help in some states. If you think you might qualify, use BenefitsCheckup.org to find out where to turn for assistance.
Retiring and signing up for these programs isn't simple. Make sure you start three months before your retirement date and be prepared to spend plenty of time getting it right.