It looks like Americans will somehow be excited about the New Year to come. Aside from the celebration of the upcoming holiday, those under the Social Security program will see some modifications in its guidelines, with some adjustments bearing good news for the beneficiaries.
Changes in the guidelines
Getting down to business, one change that Social Security recipients, particularly the retirees, should definitely look forward to in 2018 is the 2 percent increase in their cost-of-living adjustments (COLA). The Social Security Administration (SSA) will include the increase in the beneficiaries’ monthly checks starting this December.
The two percent raise may be the greatest increase that beneficiaries will receive. However, there is a catch. As what USA TODAY reported, not every beneficiary will feel the increase because deductions from Medicare may gobble up the amount of additional cash they can get from the 2 percent raise.
The recent hurricanes, Irma and Harvey, are also said to have a hand at the inflationary increase as inflation affects the COLA. Their streak of destruction has brought gas prices up by 6 percent and 13 percent in August and September, respectively. The two hurricanes also stopped the production of oil refineries and drilling platforms, disrupting the production of oil.
With the two percent raise in the COLA, senior citizens will enjoy an additional $27 COLA in their monthly benefits. From the average benefit of $1,371 every month, they will now receive a total of $1,398, according to The Motley Fool. However, if a person waited until he or she reaches the age of 70 to obtain their benefit, there is a chance that they will get a COLA of $71 per month, which leads to a total of nearly $850 yearly.
Maximum monthly benefit
The next good news the SSA has given to Americans is the upsurge in the maximum monthly benefit when beneficiaries chose to claim their pay-out at full retirement age. From $2,687, individuals who plan to claim their benefits at full retirement age will get a monthly income of $2,788 in 2018.
Rich Americans might not like the next adjustment the SSA will make because they will have to pay more for their Social Security benefits in 2018. The maximum taxable earnings cap of $127,200 has been expanded to $128,700, and those who earn between $0.01 and $128,700 have to shell out 12.4 percent from their wages as their payroll tax.
But for Americans who are working for a company, the company will pay for half of the payroll tax, bringing down the 12.4 percent, which will be deducted from their salaries to 6.2 percent.
Meanwhile, the well-off citizens or those whose incomes reach the maximum taxable earnings cap will get a minimum of $93 in their taxes in 2018. Individuals whose incomes go beyond the cap will not be affected by the payroll tax of the SSA.
Additionally, the SSA will up the full retirement age from 62 years old to 66 years and four months old next year. As a result, those who are about to reach age 62 in 2018 will need to wait a bit longer to claim their benefits in full. However, those who chose to get their benefits beyond the age of 66 will get more than 100 percent in their benefits.
The SSA will also increase the amount it will keep for those who enrolled early or before their age of retirement while being employed. From $1 in benefits that the agency will deduct for every $2 in a person’s income, the SSA will withhold $10 each month starting next year.
Retirement age and PwD
The agency will also increase the amount it will deduct from the income of individuals who plan to get their benefits in the year that they approach the full retirement age. From $1 deducted for every $3 in that person’s income, it has bumped up to a monthly deduction of $40.
Persons with disabilities will enjoy the next modification in SSA’s guidelines as it will raise the threshold for monthly disability benefits for legally blind citizens by $20 per month. They can now receive up to $1,970 monthly starting next year.
The last modification the SSA implemented for its guidelines, which will take effect next year, is the qualifications. The agency just made it more challenging for Americans to be eligible of becoming a recipient of the Social Security benefits upon their retirement.
Aside from the required 40-lifetime work credits, an individual must meet $1,300 in their income to receive a lifetime work credit. However, it has been raised to $1,320 in order for the person to get the lifetime work credit.
Some ways to boost your benefits
If you want to receive the closest amount to the maximum Social Security benefit and you cannot accomplish reaching the maximum earnings for a career that spanned 35 years, there are other ways you can do to closely reach the highest possible check you can get from your Social Security benefits, per Madison.com.
First, you can postpone your retirement. The SSA will cover the remaining years needed to reach the 35-year requirement in order to determine the average earnings. Another way that can help you almost reach the maximum is by not claiming your benefits as they will increase as you get closer to the age limits provided by the SSA.
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