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7 Ways Social Security Will Change in 2016

By U.S. News & World Report

Social Security beneficiaries won’t get bigger payments in 2016. There wasn’t enough inflation in 2015 to trigger a cost-of-living adjustment to monthly benefits. However, there are a few ways Social Security will change next year.

No payment increase. This is the third time there has been no Social Security payment increase since automatic cost-of-living adjustments began in 1975. There was also no increase in payments in 2010 and 2011. In January 2015 the cost-of-living adjustment was 1.7 percent. Social Security payments are adjusted to keep up with inflation as measured by the Consumer Price Index for Urban Wage Earners and Clerical Workers, but are not decreased when the index does not detect inflation. The average monthly benefit for retired workers is expected to be $1,341 per month in 2016, and retired couples who are both receiving benefits will receive an average of $2,212 monthly.

Stagnant tax cap. In years when there is no cost-of-living adjustment, there is also no change in the maximum amount of earnings subject to the Social Security tax, which will remain $118,500 in 2016. Earnings above this amount are not subject to the Social Security portion of the payroll tax or used to calculate retirement payouts.

Earnings limit unchanged. The Social Security earnings limit for people who work and claim Social Security payments at the same time will remain $15,720 in 2016 for people ages 65 and younger. Social Security beneficiaries who earn more than this amount will have $1 in benefits temporarily withheld for every $2 in earnings above the limit. For people who will turn 66 in 2016, the earnings limit climbs to $41,880, and the reduction in payments for earning too much declines to $1 withheld for every $3 in excess earnings. Once a retiree turns 66 in 2016, the earnings limit no longer applies and benefit payments are recalculated to factor in withheld payments and continued earnings.

Existing beneficiaries protected from Medicare premium increase. Most retirees who are already receiving Social Security benefits will continue to pay the same Medicare Part B premium in 2016, because Medicare Part B premiums are prevented by law from increasing faster than Social Security payments for most existing beneficiaries. However, retirees who first sign up for Medicare Part B in 2016 and high income Medicare beneficiaries may pay higher monthly premiums than people who previously signed up for Social Security.

Maximum possible benefit declines. The maximum possible Social Security payment for a 66-year-old worker who signs up for Social Security in 2016 will be $2,639 per month, down $24 from $2,663 in 2015. “A decrease in full maximum benefits occurs when there is no cost-of-living adjustment, but there is an increase in the national average wage index,” according to a statement from the Social Security Administration.

More online services. The Social Security Administration is continuing to add to the services offered online. Workers can already create a My Social Security account that allows them to view their taxes paid and get a personalized estimate of their monthly payments at various claiming ages. Retirees can use this account to adjust their direct deposit, obtain a benefit verification letter, request a replacement SSA-1099 form or, most recently, obtain a replacement Medicare card.

Longer office hours. Following years of cutbacks, the Social Security Administration expanded office hours in many of its field offices beginning in March 2015. However, most offices continue to close to the public at noon on Wednesdays so that employees can work to reduce backlogs. If you prefer to conduct your Social Security business in person, you will now have an hour longer to do it on most weekdays.

More from U.S. News

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7 Ways Social Security Will Change in 2016 originally appeared on usnews.com

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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