The Cost-of-Living Adjustment (COLA) for 2018 will give a 2.0 percent COLA for 2018 for Social Security and Supplemental Security Income (SSI) beneficiaries. This COLA is based on the increase in the Consumer Price Index (CPI-W) from the third quarter of 2016 through the third quarter of 2017.
It’s the biggest increase in five years, but it will not keep pace with increasing costs for seniors. The average American retiree will see only a $27 increase in their monthly benefit. And to add insult to injury, rising Medicare Part B premiums are expected to go up by $25 per month in 2017.
So what seems like an increase isn’t.
On the other side of the economic spectrum, Bloomberg BNA estimates that the federal estate tax exemption is likely to hit $11 million per couple in 2018 ($5.6 million per person, based on inflation).
The annual gift tax exclusion is expected to increase to $15,000 in 2018. That’s the first time the gift tax exclusion has increased since 2013.
Now that the Senate has passed a Republican budget plan, the battle has begun over an overhaul of our country’s tax code. This one is likely to be more combative than any we’ve seen in a long while, with special interests and trading favors surpassing common sense, making any substantive changes remote.
This makes it the perfect time to take advantage of the current laws.
While this plays out on Capitol Hill, what should you be doing for estate planning and planning for tax management of your own? Don’t count on Washington. If your estate plan has not been reviewed since the Obama administration, now is a good time to see if there are any changes in the law that may present opportunities for better tax, wealth preservation and asset protection planning and to ensure that your estate plan meets your goals. .
Call me at 516-307-1236 to make an appointment to review your estate plan and learn what has changed and what has not.