Social Security Update for 2018

Whether you're already collecting Social Security or still paying into the system, here's a quick run-down of what you need to know for 2018.

If you're already collecting benefits

• Your Social Security benefits are slated to increase 2.0% as a cost-of-living-adjustment (COLA). 
• The average monthly payment for an individual is expected to be $1,404.
• The average monthly payment for a retired couple (both receiving benefits) is expected to be $2,340.
• Early indications are that Medicare Part B premiums may continue in 2018 around $134 per month (except for high income folks). If you've been paying only $109 per month under the "hold harmless" provisions, most (perhaps all) of your Social Security increase will go toward the higher Medicare Part B premiums that you haven't yet had to pay.

If you plan to file for benefits in 2018

• If you begin collecting Social Security before “Full Retirement Age" (FRA), in 2018 you can still earn $17,040 ($1,420 per month) without penalty. Otherwise, benefits will be reduced $1 for every $2 in earnings above the limit.
• The earnings threshold is $45,360 ($3,780 per month) if you retire before your Full Retirement Age but do reach it later in 2018. In this case, benefits will be reduced $1 for for every $3 above the limit.
• Once you reach your Full Retirement Age, you can earn any amount without penalty.
• If you work while collecting Social Security early, your reduced benefits are not lost forever. When you reach FRA, your benefits will be recalculated higher to take into account the reduction caused by the earned income threshold.
• The maximum possible Social Security benefit for someone who collects Social Security at Full Retirement Age in 2018 will be $2,788 per month.

And the rest of us currently paying into the system

• Employees will continue to pay 7.65% of earnings as a combined rate for Social Security and Medicare (Social Security is 6.20%, Medicare is 1.45%).
• Employers will continue to match that 7.65%.
• The maximum taxable earnings on which you pay Social Security taxes is $128,700.
• There is no maximum earned income for the Medicare tax.
• Certain taxpayers with high earned income — $200,000+ single, $250,000+ married filing jointly — will continue to pay an additional Medicare surtax of 0.9% on income over those thresholds. And the most recent tax proposals have that continuing until 2023.

For more information, visit the Social Security Administration site.

You can also track your own benefits at MySocialSecurity.