Social Security increases benefits by 2% for 2018
The Social Security Administration has announced a cost of living adjustment (COLA) to recipients’ monthly Social Security and Supplemental Security Income (SSI) benefits. More than 66 million Americans will see the 2% increase in their payments beginning in January 2018. The increase is tied to the Consumer Price Index for Urban Wage Earners and Clerical Workers and was put in place to ensure the purchasing power of these benefits isn’t eroded by inflation. In addition to the cost of living adjustment, the Social Security Administration also announced that the maximum amount of earnings subject to Social Security tax will increase to $128,700 from $127,200.
This increase is the largest since 2012. The adjustment was a minuscule 0.3% increase in 2017, and there was no change in 2016. According to the Social Security Administration, retired workers on average collect $1,377 a month in Social Security payments, or roughly $16,524 a year. Raising the COLA by 2% will add about $27.38 a month to those payments, or around $329 for the year.
Keep in mind, all federal benefits must be direct deposited. So if you haven’t already started receiving benefits, you need to establish electronic transfers to your bank or financial institution. Please contact our office if you have any questions or need assistance.