The Social Security Administration (SSA) has issued its annual announcement detailing upcoming changes to its program for 2018. I have previously discussed the Cost-Of-Living Adjustment (COLA) and the resulting possible effects on Social Security recipients in my last blog entry, so today I thought I’d go over some other changes the agency has in store for us.
New Income and Tax Caps
The Maximum Taxable Earnings number, which is the capped amount of income that may be subjected to the SSA tax, was increased to $128,400 (not the previously reported $128,700) for 2018, up from this year’s $127,200. This figure is determined by W2s provided to the SSA by various national payroll service providers.
In order to qualify for SSA retirement, a worker must have worked at least forty fiscal quarters in their lifetime (at least since 1928) now earning at least $1,320 per quarter, just slightly up from 2017’s $1,300. The SSA is also increasing the Retirement Earnings Test Exempt Amount from $16,920 ($1,410 per month) to $17,040 ($1,420 per month) for those individuals who file for early retirement. For those who reach full retirement age, the numbers went from $44,880 ($3,740 per month) to $45,360 ($3,780 per month). Broadly speaking, these caps are how much an individual can earn outside of his or her SSA benefits before it might start reducing their monthly SSA benefit.
Speaking of full retirement age, the maximum monthly benefit an individual can draw is now up to $2,788 per month from $2,687 per month. A complex and complicated algorithm calculates an individual’s actual figure. Also, the full retirement age will be going up to 67 eventually based on the year a person was born. For those born between 1943 and 1954, it will remain at 66. 62 is still the figure for early retirement for everyone.
New Disability Income Caps
And now on to a part of the SSA program that is near and dear to me: disability benefits! There is this thing that the SSA has called Substantial Gainful Activity (SGA). When one files for SSA disability, they are not declaring that they can’t work at all, just that they can’t work full-time. With anything related to the SSA act, it is much more complicated than that when you look at the details. But, if you work and draw SSA disability benefits, that monthly income cap is now at $1,180 versus $1,170 for disabled (but not blind) individuals. The numbers are $1,970 and $1,950 respectively for those who are blind. That may not sound like much, but every bit of monthly income counts for disabled individuals. So that’s what’s new in Social Security for 2018!
If you or your child have been denied SSA disability benefits or suffer from a severe impairment that is expected to last more than twelve months and that prevents you from doing any of your past or other work or is causing developmental delay in your child, please contact our office nearest to you to set up a free consultation appointment to discuss your situation.