Retirement Health Care Costs Cited as Top Concern

October 30, 2013 (PLANSPONSOR.com) – A new study by John Hancock found that employees’ biggest retirement-related concern is the financial risk of rising health care costs.

Conducted as a part of the John Hancock Investor Sentiment Index for Signator Investors, Inc., the study found that other retirement-related concerns included changes to Social Security and/or Medicare, and running out of money during retirement. The study also found that the percentage of employees citing these concerns has increased from earlier studies.

According to the study, more than half (55%) of respondents said they were very concerned about rising health care costs in retirement, a seven-point jump from last year’s study. Overall, 89% of this year’s respondents expressed some concern about rising health care costs.

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Changes to Social Security and/or Medicare was second on the list of retirement-related concerns, with slightly more than one-third (34%) citing they were very concerned, up slightly from last year (32%). Overall, nearly three-quarters (74%) of respondents cited concern about this risk.

Running out of money in retirement was third on the list of top retirement-related concerns, increasing from 26% in 2012 to 28% in 2013. Overall, 65% of respondents this year felt this issue was of concern.

The study surveyed 1,013 investors online, 703 of whom were not retired. Respondents were queried by independent research firm Mathew Greenwald & Associates. To qualify, respondents were required to participate at least to some extent in their household’s financial decisionmaking process, have a household income of at least $75,000 and assets of $100,000.

John Hancock Financial is a division of Manulife Financial, a Canada-based financial services group, which also has operations in Asia and the United States. The John Hancock Financial Network is a national network of independent firms of financial professionals across the United States. Signator Investors Inc. acts as broker-dealers/registered investment advisers for the John Hancock Financial Network.

Social Security Announces 2014 Benefit Increase

October 30, 2013 (PLANSPONSOR.com) – The Social Security Administration (SSA) has announced a 1.5% benefit increase for 2014.

The increase will affect monthly Social Security and Supplemental Security Income (SSI) benefits for nearly 63 million Americans. The 1.5% cost-of-living adjustment (COLA) will begin with benefits that more than 57 million Social Security beneficiaries receive in January 2014. Increased payments to more than 8 million SSI beneficiaries will begin on December 31, 2013.

Other changes that take effect in January of each year are based on the increase in average wages. Based on that increase, the maximum amount of earnings subject to the Social Security tax (taxable maximum) will increase from $113,700 to $117,000. Of the estimated 165 million workers who will pay Social Security taxes in 2014, about 10 million will pay higher taxes as a result of the increase in the taxable maximum, according to the SSA.

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More information about how the COLA is calculated can be found here.

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