Changes are coming for Social Security recipients. In October, the SSA (Social Security Administration) announced updates for 2018. As usual, for most of the 60 million Americans who receive benefits, these changes are a mixed bag.
The good news
Every year, the SSA adjusts payouts for inflation. In past years, these increases have been scarcely noticeable – a piddly 0.3 percent in 2017, for example. The cost of living adjustment for 2018, however, is a full 2 percent. This means the average recipient will see an increase of about $27 per month – the biggest hike in six years.
The bad news
Annual cost of living adjustments are based on inflation. With the economy weakening (thanks, in part, to hurricanes Harvey and Irma), many Social Security recipients are burdened with greater expenses. The cost of gas, for example, rose 13 percent in September alone. And health care costs continue to skyrocket. It’s doubtful that the increase in payouts will keep pace with the out-of-pocket expenses many recipients continue to incur.
What’s more, not everyone will get to take home the cost-of-living increase. For many, it will be offset by their Medicare hold-harmless clause.
More good news
Apart from the cost-of-living increase, 2018 will bring several more positive developments for Social Security recipients:
- The maximum monthly payout will rise from $2,687 to $2,788 per month.
- Recipients who are still working but haven’t yet reached full retirement age can take advantage of slightly higher earning caps. These caps will increase by $120 for those who won’t reach retirement age in 2018, and by $480 for those who will.
- The income thresholds for those receiving Social Security Disability benefits will also go up, meaning you can earn a little more while still qualifying for benefits. The increases are modest: $10 per month for most recipients, and $20 per month for those who are legally blind.
More bad news
On the other hand, the age at which workers can claim full retirement continues to rise. In 2018, it will advance by two more months for those who will be turning 62, meaning full retirement age will be 66 1/3. This age will keep increasing in future years until it reaches 67 for those born in 1960 and onward.