Do you currently receive social security benefits? The social security administration just released information regarding the cost-of-living adjustment for 2010 on October 15, 2009.

Consumer prices have been down over the past year so anyone who currently receives or will receive social security benefits or supplemental income benefits will not see an automatic increase in 2010.

This will be the first time since 1975 that recipients will not receive an increase for the cost-of-living. This typical increase is determined by the consumer price index (CPI-W) from the third quarter of the last two previous years.

President Obama has called on Congress to extend the economic recovery payment for 2010. He is hoping that this will compensate the 57 million Americans that receive social security. He has asked for a one time payment of $250.00 to benefit the recipients.

Other changes you will see in 2010 are:

 

  • The maximum amount of earnings will not increase, these earnings are subject to the social security tax.
  • The retirement earnings amounts will not increase either.

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    There are ways however to maximize your social security payments. The number one recommendation is delaying claiming benefits, if at all possible.

    Some of the benefits to delaying your claim are as follows:

     

  • You will receive 25% increase in your payment for retiring at 66 instead of 62. Age 66 is considered full retirement and age 62 is considered early retirement. For example: At age 62 for an early retirement if your payment was $750.00 and you delayed your claim until age 66 you would receive $1,000.00 monthly.

  • You will receive another 25% increase in your payment if you delay your claim until age 70 instead of age 66. Age 70 is considered delayed retirement. For example: If you were to receive a payment of $1,000.00 at age 66 for full retirement and you delayed your claim until age 70 you would receive $1,320.00 monthly.

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    If this information pertains to you, visit TurboTax Online today to use a free tax calculator to see how this adjustment will affect your tax liability.


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