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Social Security Changes Coming in 2018

By U.S. News & World Report

Social Security beneficiaries will get 2 percent bigger payments in 2018. The Social Security program will also be tweaked in several important ways that affect how much you pay in and will receive in retirement. Here’s a look at the Social Security changes you can expect to see in 2018.

Bigger payments. The average monthly Social Security payment is expected to increase by $27 to $1,404 in January 2018. Couples who are both receiving benefits will see their payments climb by an average of $46 to $2,340. The maximum possible Social Security benefit for a worker who begins collecting benefits at full retirement age will be $2,788 in 2018, up from $2,687 in 2017.

Social Security payments are adjusted every year to keep up with inflation as measured by the Consumer Price Index for Urban Wage Earners and Clerical Workers. Social Security benefits were increased by only 0.3 percent in January 2017. Previous cost-of-living adjustments have ranged from zero in 2010, 2011 and 2016 to 14.3 percent in 1980.

[See: 10 Ways to Increase Your Social Security Payments.]

A higher tax cap. Workers will contribute 6.2 percent of their earnings to Social Security until their income exceeds $128,700 in 2018, up from $127,200 in 2017. The Social Security Administration expects about 12 million people to pay higher taxes as a result of this change. Those who earn more than the taxable maximum will not have those earnings taxed by Social Security or used to calculate retirement benefits.

Larger earnings limits. Retirees who work and collect Social Security benefits at the same time will be able to earn slightly more in 2018 before part or all of their benefit is temporarily withheld. Beneficiaries who are younger than their full retirement age can earn up to $17,040 in 2018, $120 more than in 2017, before they will lose a benefit dollar for each $2 earned above the limit. The earning limit will grow by $480 to $45,360 for those who will turn their retirement age in 2018, and the penalty decreases to a dollar withheld for every $3 earned above the limit. Once you turn your full retirement age there is no penalty for working after claiming retirement benefits and your benefit will be recalculated to give you credit for any withheld earnings.

[Read: 6 Social Security Calculators That Can Help You Decide When to Claim.]

An older full retirement age. People who will turn 62 in 2018 will need to wait until an older retirement age to claim their full retirement benefit than existing Social Security beneficiaries. The full retirement age for those born in 1956 is 66 and four months, up from 66 and two months for people born in 1955 and 66 for everyone born between 1943 and 1954. The full retirement age will further increase in two-month increments in subsequent years until it reaches age 67 for everyone born in 1960 or later. Those who sign up for Social Security before their full retirement age will receive a reduced payment. Workers with an older full retirement age also have less opportunity to boost their payments through delayed claiming. “There are fewer months between the ages of 67 and 70 to earn delayed retirement credits, meaning the maximum benefit is lower with a full retirement age of 67 versus 66,” says William Meyer, founder and managing principal of Social Security Solutions, a company that analyzes Social Security claiming strategies.

No more paper statements. The Social Security Administration stopped mailing paper Social Security statements to everyone under age 60 in 2017. If you want to check your earnings history and get a personalized estimate of your future benefit, you will now need to create an online my Social Security account. “Then you can check your Social Security status anytime, anywhere, just like you do with your other accounts,” says Andy Landis, author of “Social Security: The Inside Story.” “Try to check your Social Security at least annually, say around the first of the year, tax time or your birthday.”

[Read: How to Keep Your Social Security Number Safe.]

More security features. New security features have recently been added to the Social Security website. My Social Security account holders now need to enter a one-time security code sent to their phone or email address in addition to a username and password each time they log in. “Two-factor authentication is safer than just a username and password,” says Susan Grant, director of consumer protection and privacy at the Consumer Federation of America.

The Centers for Medicare and Medicaid Services will mail out new Medicare cards without Social Security numbers printed on them beginning in April 2018. Instead, the new Medicare card will contain a unique combination of numbers and letters. But other printed materials may still list your number. “Don’t forget that your Social Security number is not just kept on a card. Social Security numbers may exist on bank account statements, tax documents and other forms of hard copy documents,” says David Almonte, a certified public account and member of AICPA’s National CPA Financial Literacy Commission. “Be sure to properly dispose of these documents and not just blindly throw them away.”

Emily Brandon is the author of “Pensionless: The 10-Step Solution for a Stress-Free Retirement.”

More from U.S. News

10 Social Security Claiming Strategies That Work

7 Things You Can Do With a My Social Security Account

7 Tips to Live Well on Social Security Alone

Social Security Changes Coming in 2018 originally appeared on usnews.com

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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