Benefits for 2018
Since open enrollment season is upon us, now is a good time for a few quick reminders about the financial items we all need to review to be prepared for next year. This is also a great opportunity to be aware of some changes coming to social security in 2018.
Items on your year-end financial review
Here are the things you may need to review, with links to past blog posts for a quick refresher:
· Update your beneficiaries, both primary and contingent, on your insurance policies and investment accounts.
· Maximize your flexible spending account. Know how long your employer’s grace period is and decide how to spend your remaining funds.
· Budget for increasing health insurance costs and review these tips to minimize the impact to your finances.
· Sign up for Medicare if you’ll be turning 65 next year.
New Social Security payments and limits in 2018
There are some big changes to Social Security coming next year that will affect everyone.
1. Larger payments. The maximum possible benefit in 2018 for a worker who begins collecting benefits at full retirement will be $2,788. That’s an increase of $100 from the 2017 limit of $2,687. The average increase will be about $27.
2. Higher tax cap. This cap limits the amount of wages or self-employment income that is eligible for Social Security tax. The cap beginning in 2018 will be $128,700, an increase of $1,500.
3. Larger earnings limits. Retirees who work and collect benefits at the same time will be able to collect slightly more next year. Beneficiaries who are younger than full retirement age can earn up to $17,040 in 2018, which is up $120 from the 2017 limit.
4. No more paper statements. Paper statements were eliminated in 2011, but made a comeback for recipients reaching certain age milestones a few years later. They are going away completely in 2018, and probably for good this time. To view your statement, you’ll need to sign up for an account at https://www.ssa.gov/mystatement/.
Note that these are only the significant changes we know of right now. More changes may be announced later, but these have already been determined. If you are in retirement, these will affect your distributions. If you are saving for retirement, they may affect your contributions. Consult your financial advisor to make sure you understand the impact the changes will have on you.