I don’t know how you feel, however I’m looking forward to this election being over. Hopefully shortly after November 3rd!!
The markets don’t appear to care about the election for now, as the focus remains on stimulus. It doesn’t matter whether before or after the election, as long as it is passed, and it’s large. Seems to me, with much less people out of work than prior to the last stimulus, perhaps we can target these funds more efficiently to those truly suffering from the Coronavirus. Hey, we’re now over 27 Trillion in debt. The 2020 fiscal year for our Federal Government ended September 30th has us spending over 6 Trillion for the year, while collecting over $3 Trillion in tax revenue. Now that is deficit spending!!!
For the week, the Dow Jones rose .07%, the S&P 500 .21% and the Nasdaq Composite led the way, moving up .79%. The Russell 2000 broke a hot streak, retreating (.22%) for the week.
Over the pond, the developed markets are seeing a Coronavirus spike in cases which led to their markets moving down (1.45%). Emerging markets on the other hand, rose .15%.
Bond yields remain range bound with the 10 Year US Treasury ending the week with a yield of .74%.
Social Security 2021/COLA and Taxes
Social Security checks will increase by 1.3% for 2021. The adjustment will take effect in December, and appear on January checks. The increase is based on the yearly increase in the Consumer Price Index for Urban Wage Earners & Clerical Workers (CPI-U). We should know how much those over 65 will get to keep, after Medicare announces the 2021 Part B premium within a few weeks. Part B comes directly out of Social Security checks!
As you’re aware, earned income is subject to Social Security/Medicare Tax (FICA). 7.65% is the total percentage with 6.2% for Social Security and 1.45% for Medicare. The 6.2% is capped at the “wage base”, which is $137,700 for 2020. The wage base will increase to $142,800 increasing the annual employee max by $316.20. Those that earn the wage base or more will pay a total of $8,853.60.
Medicare’s 1.45% tax does not have a wage base, so you pay the % on all earned income.
Keep in mind, employers are required to match your total FICA taxes, dollar for dollar.
Just a reminder, if you have a Part D Prescription Drug plan you can shop it between now and December 7th. I’ve been reading where companies have increased premiums on existing plans while offering lower priced plans to new customers. If you don’t shop, you may find out in January, you’re paying more in out of pocket costs and now stuck until 2022!
So, you think the Social Security system needs attention? What about Medicare? It was announced the trust fund (HI Trust Fund) that finances Medicare Part A (Hospitalization) will run out of money in 2024, 2 years sooner than previously projected. More on this in future blogs…..
See below for a 90 second video on choosing Medicare coverage when you Retire:
Virtual Social Security Workshop on October 27th!
After 12 years of in-person workshops, we are proud to announce our first ever virtual workshop in conjunction with Jefferson Health! The workshop will be done via Zoom, so you can view Paul’s presentation from the comfort of your own home. To RSVP and obtain your Zoom link, please visit the Jefferson Health events page HERE. If you have any questions on Zoom and/or how install it, Ellen would be happy to assist with any questions or troubleshooting issues.