Would you be able to survive on $1,404 a month?
The most recent data from the Social Security Administration (SSA) says that was the average monthly Social Security benefit for a retired worker in June 2017.
That’s not a lot of money, but sadly it’s the lion’s share of monthly income for about 23% of married retired couples and 43% of retired elderly individuals.
If Social Security is important in your life — or the life of someone you love — you should know about some key changes that will be made to the program coming in 2018.
Here are the basic changes to Social Security in 2018
A modest cost of living adjustment is coming
Get ready for a whopping $25 increase in your monthly benefit.
More than 66 million Social Security and Supplemental Security Income recipients will see that 2% boost in benefits next year.
While $25 might not seem like a lot, it’s actually the largest increase since 2012!
You’ll seen an increased cap on monthly benefits
In 2017, the maximum that any worker taking benefits at full retirement age could receive was $2,687 a month.
By 2018, that cap is being raised so the max monthly benefit can be as high as $2,788 a month.
These numbers are calculated on optimized lifetime earnings, so your check may look a little different!
High-income workers will pay more in Social Security taxes
Starting in 2018, high-income earners must pay taxes on the first $128,700 of income.
That’s up $1,500 from the 2017 limit of paying taxes on the first $127,200 they earned.
On the other side of the issue, there’s been the case raised about the rich getting unfair amounts of Social Security themselves. The Washington Post’s Allen Sloan ran the numbers and found that in reality the typical wealthy person who gets Social Security benefits has paid in much more than he or she will get back in benefits.
Using himself as a test case, his research shows the “rich” get back between 50 and 75 cents on every dollar they paid in.
The full retirement age is inching up
People born in 1956 must wait until they are 66 years and 4 months old to receive 100% of their benefit — i.e. to reach full retirement age.
That pushes the full retirement age later by two months. Those who were born in 1955 only had to wait until they were 66 years and two months to claim full benefits in 2017.
See this benefit table from the Social Security website to learn more.
The withholding threshold for early filers is climbing
Good news for people who haven’t yet reached full retirement age and are still working.
In 2017, the SSA would withhold $1 of benefits based on your earned income for every $2 in earned income above $16,920.
By 2018, that threshold is going up to $17,040.
Thankfully, no withholding takes place once you reach full retirement age!
Disabled people will see more money
The roughly 10 million people who are unable to work and qualify for monthly disability payments from the SSA will be getting more money in 2018.
Those folks will see an increase of $10 more over 2017 levels — up to $1,180/month — if they are considered non-blind.
For those who are blind, they will receive $20 more over the prior 2017 rates. That’s up to $1,970/month from the previous monthly limit of $1,950.
Qualifying for Social Security will be harder
In 2017, you earned one lifetime work credit for every $1,300 in earned income.
By 2018, you’ll need $1,320 in earned income for one credit.
(Editor’s note: The Social Security system is set up so that you must be a U.S. citizen who has earned 40 lifetime work credits to qualify.)
After 2034, you’ll only get roughly 75 cents on the dollar in benefits
We all know about the problems Social Security is facing.
With our aging population, we’re in a situation where we’re going from 2.8 active workers for every one Social Security beneficiary right now to 2.2 workers for each beneficiary by 2035, according to the SSA.
How do you keep the promise of Social Security with that new math?
The reality is you can’t. According to recent projections, the program’s trust fund is slated to run out of money in 2034. But that doesn’t mean a big, fat goose egg for you years down the road.
The SSA estimates that incoming revenue from interest on trust fund balances and the income taxes that select Social Security recipients pay on their benefits will allow payouts of roughly three-quarters on all benefits that retirees expect.
So if you’re retiring 18 or more years from now, you can expect to get somewhere in the neighborhood of 75 cents on every dollar you contribute today. Not great news, but not the worst either.
You can use calculators to help you figure out the optimal time to claim
There are a variety of online calculators that will help you figure out the best time to claim your Social Security benefits.
Both the Consumer Financial Protection Bureau’s Planning for Retirement tool and AARP’s calculator let you pop info in and then they give you a decision tree to walk you through the process of figuring out when to claim.
The SSA’s name is being used in a popular scam
People are getting emails that pretend to be from the SSA with the subject line “Get Protected,” according to the Federal Trade Commission.
The gist of the email is that the government is offering to protect your personal info and prevent people from stealing your identity.
The text in the body of the email may mention the Safe Act of 2015, which gives it an air of legitimacy. There is also a link you can click on to get the supposed protection being offered by the SSA.
But you know the drill by now: If you click on that link that supposedly takes you to the SSA site, a keylogger virus is downloaded on your computer that allows crooks to gather your personal info as you type.
Medical offices are the #1 place where your Social Security number can be stolen
The Identity Theft Resource Center reports almost half of all identity theft now is happening in the medical field at hospitals, health insurers, medical offices and a variety of medical businesses like distributors of diabetes or dialysis supplies, medical billing services, pharmaceutical companies and so on.
There are many reasons why medical identity theft is running rampant. High turnover in the back offices and too much paperwork floating around are chief among them. The scary reality is that one errant employee can steal the identities of hundreds if not thousands of people. Without question, this is the fastest growing area of identity theft.
So what can you do? Is this just another problem without a solution? No way.
Clark has long told people not to fill our their Social Security number on any medical paperwork when you first go to a doctor. The only reason they want your Social Security is that so if you don’t pay, it’s easier to turn you over to a collection agency.
But you should also guard your SS number at these places, too…
Antivirus software company McAfee says there are other often-overlooked hot spots for criminal activity where you shouldn’t divulge the digits.
These places include colleges and universities, banking and financial institutions, state governments, local governments, the federal government, non-profits and technology companies.
This list was compiled based on frequency of data breaches that involved Social Security numbers.
Your Social Security number won’t always be on your Medicare card
For those of you on Medicare, there’s a new law in place that will phase in new cards that don’t have your Social Security number on them. But you’d better be patient; the full phase-in won’t be completed until roughly 2020!
Until then, why not consider a credit freeze to shut down the ability of crooks to steal your identity?
Helpful reminder: Don’t share your Social Security number on Facebook
Some 7% of people have posted their Social Security number on social media, according to a report coming out of Visa’s 2013 Global Security Summit!
“Sharing such sensitive information on a social network… demonstrates a misunderstanding of how easily information can be consumed on social media platforms,” the Visa report noted.
Why would anyone do this?!