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Social Security Income to Increase in 2018, But Offset by Medicare Premium Increase - When A Qualified Income Trust Is All You Need

Social Security Income to Increase in 2018, But Offset by Medicare Premium Increase

Social Security Benefit increase according to Jacksonville elder law attorney for 2018In 2018, Social Security recipients will get their largest cost of living increase in benefits since 2012, but the additional income will likely be largely eaten up by higher Medicare Part B premiums.

Cost of living increases are tied to the consumer price index, and an upturn in inflation rates and gas prices means recipients get a small boost in 2018, amounting to $27 a month for the typical retiree. The 2 percent increase is higher than last year’s .3 percent rise and the lack of any increase at all in 2016. The cost of living change also affects the maximum amount of earnings subject to the Social Security tax, which will grow from $127,200 to $128,700.

The increase in benefits will likely be consumed by higher Medicare premiums, however. Most elderly and disabled people have their Medicare Part B premiums deducted from their monthly Social Security checks. For these individuals, if Social Security benefits don’t rise, Medicare premiums can’t either. This “hold harmless” provision does not apply to about 30 percent of Medicare beneficiaries: those enrolled in Medicare but who are not yet receiving Social Security, new Medicare beneficiaries, seniors earning more than $85,000 a year, and “dual eligibles” who get both Medicare and Medicaid benefits. In the past few years, Medicare beneficiaries not subject to the hold harmless provision have been paying higher Medicare premiums while Medicare premiums for those in the hold harmless group remained more or less the same. Now that seniors will be getting an increase in Social Security payments, Medicare will likely hike premiums for the seniors in the hold harmless group. And that increase may eat up the entire raise, at least for some beneficiaries.

For 2018, the monthly federal Supplemental Security Income (SSI) payment standard will be $750 for an individual and $1,125 for a couple.

For more on the 2018 Social Security benefit levels, click here.

If we can help you understand your Social Security benefits, please call to schedule an appointment.

Randy Coleman is a member of The Florida Bar for over 30 years. He was a practicing CPA for six years prior to becoming a lawyer. His practice is limited to estate and asset protection planning, wills & trusts, elder law, probate and trust administration. He is peer review rated Preeminent, for the highest legal ability and ethical standards for over 30 consecutive years by Martindale-Hubbell, the gold standard in attorney ratings for over a century. Mr. Coleman is an honors graduate of the University of Florida Levin College of Law, and the University of Florida Warrington College of Business (Accounting/Economics).

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