The Social Security Administration announced today that monthly Social Security and Supplemental Security Income (SSI) benefits for more than 66 million Americans will increase by 2%. The 2% cost-of-living adjustment (COLA) will begin with benefits payable to more than 61 million Social Security beneficiaries in January 2018. Increased payments to more than eight million SSI beneficiaries will begin on December 29, 2017.
This is the largest increase since 2012, but comes to only $25 a month for the average beneficiary. 2017 saw a slight rise of only 0.3%.
The cost-of-living increase (COLA) is based on a broad measure of consumer prices generated by the Bureau of Labor Statistics (BLS).
The Consumer Price Index (CPI-W) rose this year, indicating that on average, prices for goods and services are more expensive. Since the CPI-W did rise, the law increases benefits to help offset inflation.
The maximum amount of earnings subject to the Social Security tax (taxable maximum) will increase to $128,700.
The earnings limit for workers who are younger than “full” retirement age (age 66 for those born from 1943 to 1954) will increase to $17,040. (The Social Security Administration deducts $1 from benefits for each $2 earned over $17,040.)
The earnings limit for people turning 66 in 2018 will increase to $45,360. ($1 from benefits are deducted for each $3 earned over $45,360, until the month the worker turns age 66.)
There is no limit on earnings for workers who are at the “full” retirement age or older for the entire year.
Read more about the COLA, tax, benefit and earning amounts for 2018.