Social Security beneficiaries will get 2 percent bigger payments in 2018. The average monthly Social Security payment is expected to increase by $27 to $1,404 in January 2018. Couples who are both receiving benefits will see their payments climb by an average of $46 to $2,340. The maximum possible Social Security benefit for a worker who begins collecting benefits at full retirement age will be $2,788 in 2018, up from $2,687 in 2017.
Over the past eight years, the annual COLA has averaged just above 1 percent. In the previous decade, it averaged 3 percent. The Social Security Administration bases the COLA on a measure of inflation called CPI-W, a statistic that captures how fast costs are rising for food, housing, clothing, transportation, energy, medical care, recreation and education.
Since most seniors are retirees, the inflation index may not accurately capture rising prices faced by seniors, especially for health care, one of the fastest-rising costs in America.
Additional changes to Social Security for 2018 include...
- A slight increase in the tax cap: $128,700 in 2018, up from $127,200 in 2017.
- Larger earnings limits: Beneficiaries who are younger than their full retirement age can earn up to $17,040 in 2018, $120 more than in 2017.
- Lower earnings penalties: The penalty decreases to a dollar withheld for every $3 earned above the limit, previously it was a dollar withheld for every $2 earned above the limit.
- Older full retirement age: People who will turn 62 in 2018 will need to wait until an older retirement age to claim their full retirement benefit - 66 and four months, up from 66 and two months for people born in 1955 and 66 for everyone born between 1943 and 1954.
- No more paper statements: The Social Security Administration stopped mailing paper Social Security statements to everyone under age 60 in 2017, so you may have to sign up for an online account to check your Social Security statement periodically and verify your information.
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