SOCIAL SECURITY BENEFITS TO INCREASE BY 2%
Social Security. The Social Security Administration has announced that monthly Social Security benefits will increase 2.0% in 2018. The 2.0% Cost of Living Adjustment is tied directly to the Department of Labor’s Consumer Price Index as determined each year by the Department of Labor’s Bureau of Statistics.
The 2% increase will benefit more than 66 million people nationwide.
Supplement Security Income. The Social Security Administration also announced a similar 2.0% increase for those individuals receiving Supplemental Security Income (SSI) based upon the same Cost of Living Adjustment increase. SSI is a program that provides stipends to low-income people who are aged 65 or older, blind or disabled.
IRS ANNOUNCEMENTS
The Internal Revenue Service also announced cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for the Tax Year 2018.
- Unified Credit Against Estate Tax. For an individual passing in 2018, the Federal unified credit against the estate tax has risen to $5,600,000. This figure was $5,490,000 in 2017.
- Annual Exclusion for Gifts. The annual Federal exclusion for gifts has risen to $15,000 in 2018. It was $14,000 in 2017.
- 401(k) Plans. The annual limitation on cumulative elective deferrals to a 401(k) plan for 2018 has increased to $18,500, up from $18,000 in 2017. This limitation also applies to 403(b) tax deferred annuities, simplified employee pensions and SIMPLE* retirement plans.
- Age 50+ Catch Up Limits. The special catch-up available to people at least 50 years old in 2014 for contributions to their 401(k) shall remain at $6,000 in 2018, same as in 2017. This also applies to 403(b) plans and governmental 457 plans. A special catch-up available for individuals who are at least 50 years old in 2017 and make eligible pre-tax contributions to a SIMPLE plan shall be $3,000, the same as it was in 2017.
- Roth IRA. The contribution limit to a Roth IRA in 2018 will be $5,500, same as it was in 2017. If you are over 50, you can contribute an additional $1,000.
- Traditional IRA. The contribution limit to a Traditional IRA in 2018 will be $5,500, same as it was in 2017. If you are over 50, you can contribute an additional $1,000.
This information is provided as a service to our clients and should be used for informational purposes only. Any specific questions regarding your particular tax circumstances should be directed to your tax professional.
*SIMPLE stands for Savings Investment Match Plans for Employees
