5 Changes to Social Security and Medicare for 2018
Retirees will receive a 2% increase in their Social Security retirement benefits in 2018 (the biggest increase in six years). The average retirement benefit will increase by $27 to $1,404 per month and the average retired couple will receive a $46 raise to $2,340 per month.
On the other hand, as I’ve mentioned before in an earlier post, Medicare Part B premiums will also go up. Part B pays for doctors’ visits and outpatient services. The average Part B Medicare premium is $134 per month ($25 per month higher than last year). Thus, the average net increase is $2 per month.
Some high-income retirees, will pay even more for both Medicare Part B and Medicare Part D prescription drug plan premiums in 2018. Individuals with modified adjusted gross income (MAGI) of more than $85,000 and married couples with MAGIs greater than $170,000 are in this target group. Keep in mind that Medicare Part B premiums are based on 2016 earnings. For more information on Medicare Part B and D premiums visit Medicare.gov. .
If you continue to work and claim Social Security benefits before your full retirement age, your Social Security benefits can be temporarily reduced or even eliminated. In 2018, you can earn up to $17,040 before losing any benefits if you’re younger than age 66. After that, you would forfeit $1 in benefits for every $2 earned over that limit.
If you turn 66 in 2018, you can earn up to $45,360 in the months before your birthday without losing any benefits. If you earn more than this amount, you would lose $1 in benefits for every $3 earned over that limit. Keep in mind that you can earn any amount without forfeiting benefits after you reach your full retirement age. Any benefits lost to the earnings cap are restored in the form of higher monthly benefits at full retirement age.
One thing that did not change with the new tax law is that Social Security benefits are still taxed the same way. They are taxed based on your combined income — adjusted gross income, plus tax-exempt interest and half of your Social Security benefits.
Earn $25,000 — $34,000: 50% of Social Security benefits are taxed.
More than $34,000: 85% of Social Security benefits are taxed.
Earn $32,000 — $44,000 50% of Social Security benefits are taxed
More than $44,000: 85% of Social Security benefits are taxed.