The “Largest Social Security Increase” in Six Years Has Just Been Made Official
Fall is fast approaching and bringing with it some good news for those receiving Social Security benefits. While the official announcement will not come until October, the Social Security Board of Trustees is releasing early projections. As it stands now, beneficiaries are on par to receive a 2.1% cost of living adjustment.
That is the biggest increase in six years.
In 2017, recipients saw a minor increase of 0.3%. That put the average monthly payment at $1,360 for single recipients and $2,260 for married couples. The 2018 adjustment will likely result in an increase of $30-$60 a month. We know this doesn’t sound like a lot. But, given there have only been three increases in the last eight years, it is certainly better than nothing.
Additionally, there is always the hope that the actual October number could be higher. Social Security analysts are attributing the larger COLA, to the stronger economy and improving job market under President Trump. Earlier this year, we published a story regarding the connection between SS and economics, which supports their analysis.
Nonetheless, COLA increases are not the only changes coming in 2018. The full-retirement age for new retirees born in 1956 will be rising by two months in 2018 to 66 years and four months. However, this is not a recent change. The increase in retirement age was signed into law by Congress back in 1983, to account for longer life expectancies.
Furthermore, the wealthy will be paying more next year. Higher wages are often seen in a growing economy. This year, those earning up to $127,000 are subject to the payroll tax of 12.4%. That number is paid in equal parts by the worker and employer, with each paying 6.2%. For 2018, the income limit is expected to increase roughly 3% taking it to just over $130,000.
Regardless, there is still plenty of work to be done to improve the system. The president’s efforts to crack down on fraud and abuse will certainly help. And, bills such as the “Social Security Reform Act” are currently working their way through Congress, and could bring much-needed changes.
With nearly 60% of retirees relying on benefit payments to survive, reform can’t come soon enough, right?