Changes to Social Security for 2013

Many Americans who are quickly approaching the age at which they will pull out of the workforce, as well as those who have already done so, may be particularly worried about their finances once they actually retire, and changes to the nation's Social Security rules could have a significant impact on their ability to live comfortably in their golden years.

For this reason, it's important that those who are planning to rely heavily on government payouts in their retirements — and polls show that most older workers are set to do just that once they stop working, particularly because their own personal savings seem likely to fall short — to better acquaint themselves with the rule changes that were made by the Social Security Administration for 2013. This will help them to better understand what to expect, and also give them a good idea of how to properly approach their finances overall.

The changes made
While the Social Security tax rates applied to both those who work for other people and those who are self-employed are unchanged from 2012's figures of 7.65 percent and 15.3 percent, respectively, there are a number of other alterations to the rules that will likely have an impact on many people's ability to collect these funds. For instance, the maximum benefit for a worker who called it a career at his or her full retirement age increased very slightly, to $2,533 per month from $2,513 in 2012. Moreover, the SSI Federal Payment Standard went up to $710 per month for an individual, from $698, and $1,066 from $1,048 for couples. Overall, there is an expected 1.7 percent increase in payouts for the year

As a consequence, the average benefit paid every month to all retired workers went up to $1,261 from $1,240 for 2013. Aged couples both receiving benefits saw their monthly payouts rise to a combined $2,048 from $2,014. A widowed mother with two children can expect to receive $2,592 instead of $2,549. Aged widows or widowers living alone will receive $1,214 per month instead of $1,194. Meanwhile, disabled workers with a spouse and at least one child will receive a payout totaling $1,919 per month, up from $1,887, while all disabled people can expect an average monthly benefit of $1,132, up from $1,113.

However, in many cases these monthly sources of income aren't likely to be enough to keep retirees financially healthy, because Social Security was only ever intended to be a supplement to traditional savings, rather than a total safety net on on which older Americans could rely solely. And it is for this reason that it may be wise for these people to look into other ways of streamlining their finances and getting the most out of their money going forward.

Credit repair can help
One way in which many Americans may be able to set themselves up for a better financial future is by taking the time to closely examine their credit situations and see where they can make improvements. While many people may feel as though their credit health is relatively strong, many might be wondering if there are ways they can boost even a good credit score.

One of the easiest ways in which most people can get their credit score increased relatively quickly is by making the decision to rid themselves of debt. This might sound like a daunting task that can be difficult to squeeze into a budget, particularly for those living on a fixed income, but money paid into accounts now will reduce the amounts that have to be contributed later, and can not only help finances in general, but also credit overall. This is because 30 percent of a person's credit score is made up of the amount of debt they carry versus their total combined maximums of all their accounts. In general, the way to max out this portion of one's score is to keep total outstanding debts to about 30 percent of credit limits, but the closer to zero a person is, the less they will pay in interest charges, which can provide massive savings over the course of a year or more.

Likewise, making sure to avoid any late payments on their accounts will help borrowers from taking another major hit on their credit ratings. This is because payment history accounts for another 35 percent of a person's score, and therefore requires that all borrowers who want to maintain healthy standings stay current on all their outstanding bills.

Finally, those hoping to improve their finances and credit in particular might want to take the time to order copies of their credit reports and check them over closely for any unfair markings that may end up adversely affecting their scores. Working with a credit repair law firm can help to put these problematic entries to rights.