I no longer just say information is power. It’s only powerful if it’s the right and most up-to-date information. As we start off the new year, I thought I would give you a roundup of some personal finance information you should keep your eye on. I also want to point out personal finance highlights from 2012.
• Credit reports. This month, the Federal Trade Commission is expected to release a national study on the accuracy of credit reports. Errors in credit reports can cause consumers to be denied credit or other benefits. The credit reporting industry has maintained that only a small percentage of credit reports contain errors serious enough to cause harm to consumers. This report will provide an independent look at just how accurate credit reports are.
• Social Security. Look for a number of changes in this benefit program. For some, the news is good. But for others, not so much.
There’s good news for the nearly 62 million Americans receiving monthly Social Security and Supplemental Security Income benefits. They will see an increase of 1.7 percent this year, according to the Social Security Administration. It’s a modest increaseccompared with the 3.6 percent cost-of-living increase received last year. There was no cost-of-living adjustment the previous two years.
High-earning individuals won’t be rejoicing in 2013. That’s because the maximum amount of earnings subject to the Social Security tax will increase from $110,100 to $113,700. Of the estimated 163 million workers who will pay Social Security taxes in 2013, nearly 10 million will pay higher taxes as a result of the increase in the taxable maximum.
One final thing. By March, everyone getting Social Security benefit payments by paper check will need to sign up for electronic payments. If you don’t choose an electronic payment option before the deadline, you’ll receive your money on a debit card.
• Medical and dental expenses. If you itemize for tax purposes, you can deduct expenses you paid for unreimbursed medical and dental care for yourself, your spouse and your dependents. But you can only deduct expenses for the year that exceed a certain percentage of your adjusted gross income. For tax year 2012, it was 7.5 percent. For tax years beginning after 2012, the percentage benchmark jumps to 10 percent.
• Improved transparency. Starting in 2012 but continuing this year will be improved information for consumers. Last year, the Department of Education and the Consumer Financial Protection Bureau pushed colleges to provide better information on what students and their families will pay. The watchdog agency also opened a student loan complaint system and one to handle individual complaints about credit bureaus. And most notably, people participating in workplace retirement plans are now going to receive better information about the fees they pay.