2018 Social Security Benefit Increases and Limits

2018 benefit increases and limits

Each year the Social Security Administration (SSA.gov) publishes Old Age, Survivors, Disability Insurance Benefits and Supplemental Security Income program rates and limits. Below is a verbatim review of the 2018 information provided by the SSA.

The important news for Social Security retirement recipients is the 2.0% Cost of Living Adjustment (COLA). The 2018 COLA increase (effective January 2018) is the highest pay hike in Social Security benefits in years.

Tax Rates
-Social Security Tax Rate for Employer and Employee: 6.20%
-Medicare Tax Rate for Employer and Employee: 1.45%
-Total Social Security and Medicare Tax Rate: 15.3%

Taxable Earnings
-Maximum Taxable Earnings for Social Security: $128,700
-Maximum Taxable Earnings for Medicare Hospital Insurance: No limit

Quarter of Coverage
-Earnings Required for One Quarter of Coverage Work Credit: $1,320
-Earnings Required for Maximum of Four Credits a Year: $5,280

Exempt Earnings
-Exempt Earnings Amount Under Full Retirement Age: $17,040
-Exempt Earnings Amount Before Reaching Full Retirement Age: $45,360
-Exempt Earnings Reaching Full Retirement Age: No Limit

Maximum Monthly Benefit
-Maximum Monthly Social Security Benefit at Full Retirement Age: $2,788

Retirement Age
-Full Retirement Age: 66
-Early Retirement Age: 62

Cost of Living
-Cost-of-Living Adjustment: 2.0%

Disability Substantial Gainful Activity
-Substantial Gainful Activity for Nonblind Disabled: $1,180

SSI Monthly Standard Payments
-SSI Monthly Federal Payment Standard for Individual: $750.00
-SSI Monthly Federal Payment Standard for Couple: $1,125

SSI Resource Limits
-Resource Limit for Individual: $2,000
-Resource Limit for Couple: $3,000

For details and to see this information in pdf format see: https://www.ssa.gov/policy/docs/quickfacts/prog_highlights/RatesLimits2018.pdf

Posted in Blog Writing | Leave a comment

Biggest Pay Hike in Years Predicted for Social Security Recipients

2018 COLA increase

Good news! Social Security beneficiaries will likely receive a 2.2 percent cost-of-living (COLA) increase in January 2018. This is the largest COLA increase in years. Table 1.0 indicates the history of COLA raises. In 2016, Social Security recipients received a 0.3 percent COLA increase. Many experts called this a “Diet COLA.” In 2009 and 2010, no recipient received a COLA. (Click on Table 1.0 to Enlarge)

Table 1.0 History of Social Security Cost-of-Living (COLA) Increases.

COLA History

SOURCE: SSA (www.ssa.org)

Social Security Beneficiaries have received an annual COLA increase since 1975. More than 60 million American are predicted to receive a 2.2 percent increase to their monthly Social Security checks. Many Americans rely on Social Security COLA increases to help soften the blow of higher costs for utilities, food, and rent. According to the Senior Citizens League, (http://seniorsleague.org/loss-of-buying-power-press-release) Social Security beneficiaries have lost nearly one-third of their buying power since 2000. In the Senior Citizens League’s study titled, “Social Security Loss of Buying Power,” findings indicate that a big loss of buying power, from 23 percent in 2016 to 30 percent has occurred over the past 12 months. This was mostly due to inflation, which has begun to increase. The study notes that in the past year, prescription drugs expenses experienced the highest and most rapid climb.

From 1975 to 1982, COLAs were effective with Social Security benefits payable for June in each of those years. Today COLAs (if there is one) become effective in December. The amount of an annual COLA is determined by the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). According to the Social Security Administration (SSA), the CPI-W is verified and published by the Bureau of Labor Statistics, Department of Labor. The COLA for December 2017 will be based on the increase in the third-quarter average CPI-W for 2017 over the average CPI-W for the last base quarter. The last base quarter is the third quarter of 2016, the last year in which a COLA became effective.

Annual reports by the Board of Trustees for the Social Security Trust Funds, show estimates of future COLAs. Table 2.0 provides future COLA estimates based on three sets of economic assumptions from the 2017 OASDI Trustees Report (the latest available report). The Board of Trustees regards the intermediate estimates as their best estimates. (Click on Table 2.0 to enlarge.)

Table 2.0 Estimates of Future COLA Increases
COLA Estimates

SOURCE: Social Security Administration (SSA), August 11, 2017, (www.ssa.gov).

Posted in Blog Writing | Leave a comment