Save More in 2018: Retirement Contribution and Social Security Limits on the Rise
The maximum contribution to 401(k) accounts is being raised by $500 in 2018, the first increase in three years. If you have not already done so, now is the time to plan for contributions into your retirement accounts in 2018.
Retirement Contribution Limits
Don't forget to account for any matching programs offered by your employer as you determine your various funding levels for next year.
Monthly Social Security and Supplemental Security Income (SSI) benefits for more than 66 million Americans will increase 2.0 percent in 2018.
The Social Security Administration announced this week a 2 percent boost to monthly Social Security and Supplemental Security Income (SSI) benefits for 2018. The increase is the largest since 2012, and is based on the rise in the Consumer Price Index over the past 12 months ending in September 2017.
For those still contributing to Social Security through wages, the potential maximum income subject to Social Security tax increases 1.2 percent this year, to $128,700.
What Does It Mean for You?
Social Security & Medicare Rates
The Social Security and Medicare tax rates do not change from 2017 to 2018.
Note: The above tax rates are a combination of 6.20 percent Social Security and 1.45 percent for Medicare. There is also 0.9 percent Medicare wages surtax for those with wages above $200,000 single ($250,000 joint filers) that is not reflected in these figures. Please note that your employer also pays Social Security and Medicare taxes on your behalf. These figures are reflected in the self-employed tax rates, as self-employed individuals pay both halves of the tax.
In 2012 my Social Security was launched to allow online access to your Social Security account. To date, over 30 million Americans have created an account. Effective June 10 there will be a second way to authenticate your identity and gain access to your online information using your e-mail account.
Given the increased risk of identity theft, the Social Security Administration (SSA) recently required you provide a cell phone number in addition to your username and password to access your account. After tremendous backlash from users, the SSA rolled back this additional authentication procedure.
To solve this problem the new SSA login protocol adds authentication through either a one-time-use code sent to your cell phone or a one-time-use code sent to your requested e-mail.
To access my Social Security after June 10 you will first enter your username and password. You will then be required to enter your security code sent to you via cell phone or your email address.
Which method to use?
If you think the SSA is vulnerable to hack, you may wish to choose the email option since they already have your email in their system. Adding your cell phone number to your account provides yet another piece of personal information that could be stolen. Just be sure your email does not place the one-time security code in junk or spam folders.
The SSA is launching a campaign to announce this change along with recent updates to their website. Look for this correspondence, but do not lower your attention to the possibility of fraud. Would-be crooks could use this announcement as an opportunity to send out fake messages.
Is Social Security Income Taxable?
If you collect Social Security benefits, you might have to pay federal income tax on part of those payments. These tips can help you determine if you need to do so.