Slideshow What clients need to know about Social Security changes

Published
  • March 19 2018, 5:19pm EDT
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The changes the Social Security Administration announced in October will impact clients approaching retirement, as well as those who have already retired and are receiving Social Security benefits.

The adjustments will result in higher checks for some beneficiaries, while those on Medicare likely won’t see a difference. A couple other key highlights are the increase in the cost of living adjustment and the shifting age for full retirement.

Every year Social Security reviews the CPI from the last four quarters. Then, it determines if a cost of living adjustment will be granted for the next year. For 2018, beneficiaries will see the largest increase in their payments since 2012.

For decades, the age for people in the U.S. to receive full retirement benefits from the Social Security Administration was 65, but slowly that number is creeping higher. When the SSA made its annual announcement for changes to its program for 2018, the age requirement ticked upwards again.

The aim of the administration, it says, is to continue to hike up the requisite until it hits 67 for people born after 1957.

The earliest age at which retirement benefits can be claimed is 66 years and two months old for those who reached their 62nd birthday in 2017. For individuals who hit that milestone in 2018, the age rises to 66 years and four months.

The adjustments went into effect on January 1, 2018. Scroll through to learn about five other core changes to Social Security that clients need to know:

Cost of living adjustment

For 2018, Social Security beneficiaries will receive a 2% increase in their payments, the largest increase since 2012’s 3.6% raise.

Read more: Are your clients clueless about Social Security and Medicare?

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High taxable maximum earnings

The maximum possible benefit for a single worker who begins receiving benefits at full retirement age will go from $2,687 per month to $2,788.

Read more: A Social Security reality check

Higher full retirement age

For clients who turned 62 in 2017, the full retirement age is 66 and two months. But for those who have their 62nd birthday in 2018, full retirement age is 66 and four months. The SSA will continue to add two months per year to the full retirement age until reaching the goal of 67 as full retirement age. For anyone born in 1960 or later, 67 will be full retirement age.

Read more: Don’t let negativity ruin your client’s Social Security planning

Higher earnings limits

Clients who work while receiving Social Security benefits are subject to limitations on how much they can earn without having their Social Security benefits reduced. A beneficiary who is less than full retirement age can earn up to $17,040 in 2018, up from $16,920 in 2017, and still receive the full benefit available. Those who reach full retirement age in 2018 can earn up to $45,360 (up from $44,880) without any reduction to their Social Security benefit. Once a beneficiary reaches full retirement age, there is no limitation on earnings.

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Higher disability thresholds

Clients who are legally blind and receiving Social Security disability benefits will receive a maximum of $1,970 per month (up from $1,950 in 2017), and non-blind disabled beneficiaries will receive a $10 increase, up to $1,180 per month.

Read more: Help clients cope with expected — or sudden — disability