Social Security checks will be going up by 2% in 2018, SSA announced on Friday, October 13. A sharp rise in the gasoline index following the recent hurricanes was responsible for a blip in the CPI-W in the third quarter ending September 30. The maximum earnings subject to Social Security tax will be going up to $128,700 from the current $127,200. The earnings test threshold for 2018 will be $17,040 (up from $16,920) or $45,360 ($44,880) in the FRA year. To see SSA’ s new Fact Sheet click here: https://www.ssa.gov/news/press/factsheets/colafacts2018.pdf.
For more on how the COLA is calculated, click here: https://www.ssa.gov/oact/cola/latestCOLA.html.
The average wage index, which determines the bend points and the increase in benefits for people who haven’t turned 62 yet, increased by just 1.18%, well below the average of about 4%. The bend points that will be used to calculate the PIA for people who turn 62 next year are $896 and $5,399 (compared to $885 and $5,336 this year). See more here: https://www.ssa.gov/oact/cola/AWI.htmll.
Elaine will be covering the new COLA in depth in next week’s newsletter.