Here are the most important Social Security changes for 2018. This is not all that’s changing, just what I think is most important.
Maximum Taxable Earnings
6.2% of your paycheck goes to Social Security tax (unless you’re self employed and then it’s 12.4%). However, there is a maximum amount of income that you pay this tax on. In 2017 this cap was $127,200. In 2018 the cap increases to $128,400.
Quarter of Coverage
Most of the Social Security programs require 40 ‘credits’ to qualify for benefits. So what does it take to get a ‘credit?’ It changes every year but for 2018 it will be $1,320. This is up from the $1,300 in 2017.
The amount you can earn before the SSA starts to withhold your benefits has increased from $16,920 to $17,040. Keep in mind that this only applies to benefits paid prior to full retirement age.
Cost of Living Adjustment
In most years the Social Security Administration increases benefits to keep up with inflation. It doesn’t always happen though. In fact, in the past 10 years there have been 3 years with a 0% increase. However, in 2018 benefits will increase by 2%.