A 7.3% increase in the Wagebase for 2017
The Social Security Administration has just announced 2017 changes to benefits & taxes. While Social Security recipients will see a 0.3% increase in benefits in 2017, wage earners will see the income subject to Social Security tax increase from $118,500 to $127,200 or a 7.3% increase.
Why did the Wagebase increase by so much?
The short answer is that the Social Security Wagebase increases each year based on the increase in average wages, but it shall not increase in years when recipients fail to receive an increase in benefits. Because there was no COLA in 2016, the 2017 Wagebase reflects two years of earnings growth.
A Medicare alert for higher income retirees
There will be a similar large spike in Medicare Part B premiums for higher income retirees (approximately 25%) in 2017 absent Congressional action. Last year’s budget bill provided relief for 2016, but the 2017 protections were limited. We will provide an update on this later in the year once it’s finalized.
As always, if you have questions on this or need more, please contact your Odyssey consultant.