A major section of the country depends upon the retirement benefits. There are some people who rely on the retirement benefits for purchasing their bread and butter. So, any change in the retirement benefits catches the instant attention of these people.
It is said that there will be certain changes in the retirement benefits in the year 2012. Read along to know about the retirement benefit changes that are going to come in the next year. Know about the changes and inform your grand father or any other senior person about them. It will help them to protect their financial health in the coming year.
Changes that you may witness in the retirement benefits
Here are some key changes which are likely to come in the next year:
1. Workers will have to pay higher Social Security tax
It is expected that around 10 million workers will have to pay more Social Security taxes in the year 2012. In the current year, the workers are required to make Social Security tax payments on the first $106,800 of their earnings. However, things will be changing from the next year. The workers will need to pay tax on the first $110,100 of their earnings.
2. The premiums on the Medicare Part B may increase for some people
If you have been participating in Medicare from the year 2009, then you may have to pay an extra $3.50 on the premiums. The premium rate on the standard Medicare part B will be $99.90 in 2012. People who signed up for Medicare in the year 2010 are now paying $110.10 for the premiums. Others, who have joined Medicare in the present year, are paying $115.40 on the premiums. These people will be certainly be happy as they’ll receive Medicare benefits by spending less dollars in the next year.
3. Seniors are likely to receive bigger Social Security checks
There is good news for the people who meet the household expenses through the Social Security paychecks. They will get fatter paychecks in the year 2012. The federal government has decided to hike the Social Security payments to 3.6% in the next year. This means retirees will get an extra $43 every month.
4. Greater chances of qualifying for the saver's credit
If you're single and earn around $28.750, then you may qualify for the saver's credit in 2012. You may get tax credit up to $1000. If you are the head of the family with an income of around $43,125, then also you may be eligible for tax credits. The catch is you need to contribute to the retirement accounts regularly.
5. Many people can get investment advice from retirement administrators
A new rule will go into effect on and from 27th December, 2011. As per this new rule, the retirement savers will have the right to get some useful advice from the administrators of the retirement plans. The catch is that the retirement savers may get advice from the administrators only when they fulfill certain requirements.
6. The contribution limit for 401(k) retirement plan will increase
Individuals can contribute around $17,000 to their 401(k) and 403(b) retirement plans in the year 2012. In the present year, people are allowed to contribute only up to $16,500 to these retirement savings accounts. The relaxation of the contribution limit is certainly welcome news for the individuals, who were not satisfied by contributing only $16,500 to the 401(k) and 403(b) accounts. However, the individuals who are around 50 years or above, can only contribute $5500 in the year 2012.
Last but not the least, if you regularly save your hard earned dollars in the retirement savings accounts such as 401(k) account, then you may get extra information on the fess deducted from your account. You can have a look at your statement, and get the details about the fees that you have paid knowingly or unknowingly, after you have started participating in the retirement plan. It will make the entire system more transparent.