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Allef Vinicius
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Advisors, here is good news for your retired clients.
Social security benefits will increase by 2.8% next year, the Social Security Administration announced on Thursday.
This is the largest annual cost of living adjustment, or COLA, since 2012, according to InvestmentNews. The SSA has increased benefits by 2.0% this year and only 0.3% in 2017. No increase in 2016.
On Friday, the government said Medicare Part B premiums, which cover outpatient services and doctors' fees, would rise by $ 1.50 to $ 135.50 a month next year. These Medicare premiums are usually deducted directly from Social Security benefits.
A COLA of 2.8% would increase the average social security benefit from $ 39 to $ 1,461 per month. This would also increase the maximum benefit for a person who retires at the full retirement age of about $ 73, to bring it up to $ 2,861 a month.
The COLA also affects the amount of money that people can earn without risking losing their benefits if they apply for it before the retirement age. The income ceiling will increase from $ 17,040 this year to $ 17,640 in 2019.
And that has tax consequences for the senior employees who are still working. The maximum amount of earnings subject to the social security tax will increase from $ 128,400 to $ 132,900 next year.
–Ross Snel
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