December is a time of winding things down. The trees are bare and there may be snow the ground. The days are getting shorter, and so are our lists of things to do before the year’s end.
But for folks on Social Security, the last few days of the year are kind of a big deal. Income thresholds get reset, eligibility criteria change and some benefit amounts get frozen. A few of these are trivial enough that you can put off until January without too much concern.
Others, however, if left undone, may result in reduced benefits, unexpected overpayment notices and lengthy delays in corrections when you do get around to taking care of them. So, taking preventative steps today can help prevent serious problems after the New Year begins.
Report work income earned near the end of the year
If you were working when you got Social Security, report your earnings as soon as you can. The SSA measures income by calendar year, not by the date a paycheck clears your bank account. Delay may result in temporary overpayment notices or benefit reductions. The earlier you report, the cleaner your record will be. Plus, any necessary adjustments will be simpler.
Double-check direct deposit information
Many people close accounts, change banks, or otherwise get new routing numbers late in the year. When a Social Security payment is returned from an old account, it can take weeks to receive your check. The holidays also slow down corrections. Spending a minute to verify your direct deposit information before January can save a missed payment.
Review Medicare premium deductions
If you are enrolled in Medicare Part B or D, your premiums are generally automatically deducted from your Social Security check. There may be additional deductions as well for those with higher income on past tax returns. Mistakes are rare, but they can happen. Check now so you won’t have to deal with several months of incorrect deductions. It’s also much easier to correct now rather than waiting until closer to the New Year.
Report changes in living arrangements
If you have a change of living arrangements like moving in with family, entering assisted living or another individual moving into your household, this may impact your benefits. This is especially true for SSI.
The SSA would like to be informed of these changes as soon as possible. They may ask you to pay back benefits if you do not report in a timely manner. Set aside a few minutes before the year’s end to ensure your records are up to date.
Check that the COLA increase looks right
Social Security will automatically make any cost of living adjustments, but it never hurts to review your notice just in case. They do make occasional errors, and even a small amount can make a difference over the course of a year. If there is a problem, it’s best to correct it sooner rather than later.
Revisit spousal or survivor benefit options
Events such as marriage, divorce, or the death of a spouse can make you eligible for higher Social Security benefits. Many folks are eligible for more but never file the paperwork. The SSA won’t automatically place you in the best position, so checking your eligibility before the year is up can ensure that you don’t leave money behind.
Adjust federal tax withholding if needed
A portion of your Social Security benefits may be taxable depending on your overall income. Many retirees fail to withhold enough and are surprised by a tax bill. To adjust your withholding you must file paperwork in advance for it to take effect next year. It’s wise to adjust before January to smooth out cash flow.
Report any lump-sum payments received
If you received any one-time lump sum payments, such as a settlement, back pay, or large withdrawal, it may affect SSI eligibility. One-time payments, even a single payment, are not exempt. If you report payments before January you can ensure they will be included in the right tax year. Timing is everything when the SSA determines eligibility.
Update your address and contact details
Keep your address and contact information up-to-date with SSA and Medicare. They still send a lot of important information by mail, and if you miss a mailed notice, you could miss a deadline. If the U.S. Postal Service returns a notice sent to you, SSA generally assumes that you received it.
Review state-level supplements or assistance
Some states provide additional payments or programs if you qualify for Social Security. Many of these require annual confirmation. Failure to renew on time can result in benefits abruptly ending with little warning. Many of these deadlines are at the end of the year, so it is a good time to check in now to avoid a nasty surprise.
Document changes in caregiving or dependent support
Dependent spouse and disabled adult child support may impact your benefits and taxes. The SSA is likely to consider these matters if your records change or a discrepancy arises, so keeping organized documentation is key. It is best to update such information before January, so as to avoid disputes or confusion later on.
Set up or update your SSA online account
SSA uses online accounts for notices, reporting income, and benefit letters. Verifying your identity may take time, especially during busy periods. Create or update your account before January to avoid holiday delays. Without an updated account, even minor problems can take much longer to get resolved.
Sources: Please see here for a complete listing of all sources that were consulted in the preparation of this article.
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