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​​​​​​​​​​​​by Barbara O’Neill, Ph.D., CFP®

Barbara O’Neill, Ph.D., CFP®, is a distinguished professor in the School of Environmental and Biological Sciences at Rutgers University and is Rutgers Cooperative Extension’s Specialist in Financial Resource Management. She has received more than 35 national awards for program excellence and over $1 million in funding to support financial education programs and research. O’Neill serves as the Academic Editor of the Journal of Financial Planning.

Editor’s note: To view Barbara O’Neill’s 90-minute webinar on which this article is based, visit This article was updated Dec. 22 to reflect the passage of the Tax Cuts and Jobs Act.


For the past three years during December, I’ve presented a 90-minute webinar for financial educators and counselors that reviews key personal finance news stories that took place during the previous calendar year. It is one of just a few comprehensive annual reviews of personal finance research, events, legislation, trends, and educational resources in existence (NEFE and NextGen Personal Finance also do trend reviews). The webinars are an eclectic collection of facts and figures on a wide variety of personal finance-related topics.

This article presents a 2017 Personal Finance Year in Review webinar summary with embedded source links provided for additional information. If a link leads to a “paywall” that requires a subscription or payment, source material may be able to be accessed at no cost by searching online using an article’s title and author. Information is organized according to its placement in various webinar segments beginning with empirical research findings and concluding with a preview of 2018 annual limits related to financial planning.

Research Studies

Health care was the focus of a variety of studies in 2017. A study by Bankrate found that one quarter of Americans skipped necessary medical care due to the cost. Millennials were the generation most likely to not seek medical attention. The study also found that 35 percent of a nationally representative sample of 1,002 U.S. adults said they were “very worried” about having affordable health care coverage in the future and 21 percent were “somewhat worried.” Time magazine reported on a study by the Transamerica Center for Retirement Studies, which found that, of 39 percent of people globally who retired sooner than planned, 29 percent did so because of poor health. In another study by the Center, health issues were cited as a reason why employees retire by 32 percent of employers.

A study by the Commonwealth Fund found that 28 percent of U.S. adults ages 19-64 who had health insurance were underinsured, which was defined as having out-of-pocket health care costs, excluding premiums, equal to 10 percent or more of household income. Deductibles have become an increasingly large factor in underinsurance with 52 percent of underinsured adults reporting problems with medical bills and debt and 45 percent not getting care because of the cost. Another health-related study, examining the purchase of long-term care (LTC) insurance, found that the duration of benefits has shrunk, the elimination period has lengthened, and the average annual LTC policy premium is $2,727.

A study reported in 2017 by the Center for Retirement Research (CRR) at Boston College found that each child increases the share of households with parents in their 50s who are at risk of not being able to fund retirement by 2 percent. Reasons include lower labor force participation and income of mothers and an increase in family consumption. Another impact on retirement income is investment fees and expense ratios. A study by Israelsen published in the AAII Journal found that reducing portfolio expenses from 2 to 1 percent increases the amount available for withdrawals from a $1 million portfolio by over $20,000 each year for 25 years.

Several studies investigated retirement preparedness. The 2017 Retirement Confidence Survey (RCS) by the Employee Benefit Research Institute found that 47 percent of U.S. workers reported having less than $25,000 in retirement savings, excluding home equity and a pension, and 24 percent had less than $1,000 saved. Only 20 percent of workers have $250,000 or more saved and 41 percent of workers or their spouse have done a retirement savings calculation.

Similar results were found by the CRR at Boston College, which found that 52 percent of working-age U.S. households are at risk of being unable to maintain their standard of living in retirement. Many recognize the possibility of a shortfall but 19 percent do not. Contributing factors include increased life expectancy, declining Social Security income replacement, and the shift from pensions to defined contribution savings plans. Older Americans are entering retirement carrying more debt. According to a paper by the Retirement Research Center at the University of Michigan, more Americans between ages 56 to 61 are carrying more debt than any time in recent history. Another retirement problem receiving increasing attention is the social isolation of retirees, which has been deemed a risk equal to or greater than major health problems such as obesity.

Studies about retirement savings plan contributions indicate a lack of participation by many American workers. A study by the PEW Charitable Trusts found that 25 percent of millennial adults participate in employer-sponsored defined contribution retirement plans versus 40 percent of Generation X and 43 percent of baby boomers. Stated another way, a large majority of millennials have no retirement savings plan.

A CRR at Boston College study of individual retirement account (IRA) usage found that IRAs are primarily funded by 401(k) plan rollovers and higher income households. Contributions accounted for just 13 percent of all new money flowing into IRAs. Contributors tended to be more educated and more likely to contribute to a 401(k) plan as well. Research on the best states to retire to compared how long $1 million in savings would last in each state. Not surprisingly, retirement savings stretched the furthest in southeast states where it lasted at least 25 years. In other parts of the country, with higher costs of living (e.g., Hawaii, California, and New York), it lasted less than 18 years. A study by the Charles Schwab brokerage firm found that people with a written retirement plan are 60 percent more likely to increase their 401(k) contributions and twice as likely than others to stick to a monthly savings goal. But only 24 percent of Americans have a financial plan in writing, according to the study. Those with a plan are also more likely to have a budget and an emergency fund.

Studies of savings behavior produced mixed results. A survey by GOBanking Rates of more than 8,000 Americans found that 57 percent of respondents had less than $1,000 in a savings account. On a more positive note, 25 percent of Americans said they had $10,000 or more in savings, an increase of 10 percentage points from 2016. The 2017 Consumer Federation of America America Saves Week survey found evidence that savings habits eroded during the past decade with 46 percent of respondents having a savings plan with goals versus 62 percent in 2008 and 46 percent saving for retirement at work versus 55 percent in 2008. A 2017 study also found that parents set more money aside for college for sons than for daughters.

College-decision making studies also made headlines. A Mount Holyoke College study of career outcomes found that having a high GPA and internship positions were strongly related to job market success. Students who spent two summers working in internship positions were significantly more likely than others to have jobs six months after graduation. About 61 percent of U.S. students in 2017 had an internship. Another survey by the Wall Street Journal found decreasing support for the value of a college degree, especially among younger people and those without a four-year college degree. A Gallup poll found that adults with the most student loan debt have the most qualms about their higher education choices. More than half of 90,000 respondents said they would change at least one decision if they had to do it all over again: 36 percent would choose a different major, 28 percent would choose a different institution, and 12 percent would pursue a different degree.

A 2017 paper by Case and Deaton described relationships between economic distress and poor health outcomes. Their findings indicated that middle-aged White Americans with limited education are increasingly dying younger than their peers, often from so-called “deaths of despair” (e.g., suicides, drug overdoses, and alcohol-related deaths). The loss of steady middle-income jobs for those with a high school diploma or less has triggered many problems. Those with less education are more likely than college-educated peers to be unemployed, unmarried, or afflicted with poor health. Research by the Federal Reserve Bank of New York found that more than 1 in 10 student loan borrowers are at least 90 days behind on payments and the delinquency rate is higher than other forms of credit (e.g., mortgages, credit cards, and car loans). About 5 percent of borrowers owe more than $100,000 but they account for almost a third of outstanding debt.

Different types of credit were also studied. About 60 percent of American consumers are enrolled in a credit card rewards program. According to economists at the Federal Reserve Bank of Boston, U.S. households that don’t use credit cards subsidize those that do. Non-credit users lose an average of $50 per year, while households that pay with credit cards gain an average of $240. Costs go up for everyone for merchant interchange fees but only those collecting rewards benefit. A 2017 article about a study by the National Multifamily Housing Council noted that a growing percentage of renters believe it is cheaper to rent a home than to buy one. The top reason given for renting across all age groups was convenience and flexibility.

Government Agency Reports

The St. Louis Federal Reserve reported that the September 2017 U.S. savings rate was 3.1 percent. The personal savings rate is calculated as the ratio of personal saving to disposable personal income. In addition, the term “adulting” was formally studied with empirical research in 2017. A U.S. Census Bureau study described four milestones of adulthood: moving out of a parent’s house, getting married, having a child, and getting a job. In 1975, 45 percent of Americans reached these milestones by age 34. In 2016, that percentage fell to 24 percent. One in three people ages 18 to 34 (about 24 million people) lived in a parent’s home in 2015, versus one in five in 1975.

The 2017 Federal Reserve Report on the Economic Well-Being of U.S. Households reported household wealth data from the triennial Survey of Consumer Finances. The typical American family had a $97,300 net worth in 2016, up 16 percent from 2013. The richest 1 percent of households controlled 38.6 percent of total wealth. Only the richest 10 percent of Americans had a net worth greater than 2007 levels and 52 percent of American families owned stock. Younger, less educated, and lower-income workers remain far short of their pre-recession income and wealth. The Federal Reserve also announced that U.S. median income rose to $59,039 in 2016 and that Americans are enjoying the strongest sustained income growth this century after a long stretch of stagnation.

Key Financial Events and Trends

In 2017, the oldest baby boomers, who turned age 70 in 2016, reached the required beginning date (RBD) for taking withdrawals from traditional IRAs and employer retirement savings plans: April 1, 2017. The RBD, the latest possible date allowed to take a mandatory required minimum distribution (RMD) from traditional IRAs and tax-deferred plans, is April 1 of the year following the year that an individual reaches age 70½ and baby boomers are there now. At this time, retirees are required to spend down these accounts, whether they need the money or not, and withdrawals are taxed as ordinary income.

A 2017 article in the AAII Journal noted that the RMD schedule does not fit retirees’ spending patterns. The first RMD at age 70½ is 3.65 percent of the account balance and the RMD at age 90 is 8.77 percent of the account balance, which looks like a “waterfall” when plotted on a graph. About $10 trillion is sitting in baby boomers’ tax-deferred accounts. If they do not calculate the amount of their RMD correctly, the penalty is 50 percent of the amount that they failed to withdraw. To help retirees make RMD payouts without exhausting their assets, several large investment companies have developed new RMD-oriented mutual funds that are similar in structure to target-date funds.

Saving and investing topics also made headlines in 2017. A Wall Street Journal article noted that retirees continue to get squeezed and are concerned about making their savings last. While the Dow Jones Industrial Average (DJIA) index has tripled since the trough of the financial crisis, the average one-year CD has not paid more than 1 percent since 2009. The DJIA stood at 24,812 (as of 12/21/17), a more than 20 percent increase since the 2016 election, and the value of the digital currency Bitcoin surpassed $10,000 for the first time in 2017. One Bitcoin was valued at $15,397 on Dec. 21, 2017. As a result of a strong stock market performance, stocks may have become an outsized portion of investors' portfolios, thereby necessitating some rebalancing. Market gains have been fueled by strong corporate earnings, economic growth, central bank growth, and the promise of income tax reform. Roth IRA accounts, which are individual retirement accounts funded with after-tax dollars that provide tax-free withdrawals of money withdrawn during retirement, celebrated their 20th anniversary in 2017. They were established by the Taxpayer Relief Act of 1997 and named for a U.S. Senator from Delaware. With respect to saving and investing, several 2017 articles noted that, to be effective and more likely to be achieved, financial goals need to be combined with ongoing habits or systems.

The percentage of Americans working past age 65 hit new highs in a July 2017 jobs report. Almost one in five (19 percent) of those age 65-plus were working at least part time. Age 65-plus is expected to be the fastest growing demographic in the workplace by 2024. Another labor issue related to older persons is the increasing number of pension risk-transfers where employers with defined benefit pensions make deals with insurance companies to take responsibility for retirees’ monthly benefit, thereby shielding themselves from market volatility. Prudential is the leading insurance company doing pension risk-transfer contracts. Consumers who are affected by these pension plan changes have the safety net of state guaranty associations instead of the Pension Benefit Guaranty Corp (PBGC).

Natural disasters were in the news in 2017 with names like Harvey, Irma, and Maria. Not surprisingly, insurance companies continue to shift the risks and costs of major storms to consumers. For example, flood insurance policies have a 30-day waiting period before policies take effect, hurricane deductibles (from 1 percent to 10 percent of the insured value of a building) are common, and policy clauses may state that, if a covered and a non-covered event happen simultaneously (e.g., strong winds and flooding), neither event is covered. Property buyouts are increasingly being considered for frequently flooded houses.

On the banking front, Americans are hoarding money in checking accounts. The average U.S. checking account balance in 2017 was $3,600, up from $1,000 in 2007. A total of $10.7 trillion is sitting in total bank deposits and $2 trillion in checking accounts. Reasons include a reluctance to spend due to economic uncertainty, a steady job market, perceived inadequate investment options (about half of Americans do not own any stock), and interest rates on CDs and savings accounts that are barely above checking account interest rates. A 2017 Bankrate survey found that fees on basic checking accounts and requirements to avoid them have been increasing. Some 38 percent of banks surveyed offered non-interest-bearing checking accounts without fees or minimum balances. The average monthly service fee for an interest-bearing checking account was $14.69 and the average balance required to avoid a fee was $6,485. Other bank fees noted in a 2017 AARP article were fees for paper statements, overdraft transfers, non-network ATM usage, excess activity (i.e., too many withdrawals or transfers in a statement period), and check imaging services.

Changes to credit reporting and scoring took effect in July 2017. The “Big Three” credit reporting agencies are now excluding information about tax liens and some civil debts if it does not include specific personal information about consumers (e.g., Social Security numbers and dates of birth). This change may make loan screening more difficult for lenders and the costs of poor decisions could be passed on to all consumers.

The biggest credit-related story of the year was the Equifax hack, resulting in exposure of the personal identification information (PII) of 145.5 million Americans. Criminals obtained the “Crown Jewels” of PII including names, addresses, Social Security numbers, birth dates, credit card numbers, and driver’s license numbers. As a result, the former Equifax CEO stepped down, there was increased public discussion of alternatives for Social Security numbers to establish a person’s identity, and consumers were told to “be vigilant” in perpetuity (e.g., checking credit reports, reviewing bank/credit card statements, fraud alerts, credit freezes).

A 2017 report by consulting firm Javelin Strategy & Research and identity-theft-protection firm LifeLock Inc. noted that 15.4 million U.S. consumers were victims of identity fraud in 2016, an 18 percent increase in victims from 2015, with $16 billion in total losses. The bulk of this fraud is card activity, with a 15 percent increase in online purchases (i.e., “card-not-present” fraud). With online shopping fraud, chips found in consumers’ credit cards are useless because they are not needed. In addition, criminals who have stolen card numbers can counterfeit debit and credit cards already held by consumers.

Creative ways to compensate and assist financially distressed workers emerged in 2017 in the wake of the CFPB payday lending rule (see the next section). The CFPB crackdown on payday lenders will require alternative forms of small-dollar credit. More employers started teaming up with financial institutions to offer small personal loans to their workers who lack a credit history and access to credit cards or traditional bank loans. Loans are kept confidential from a worker’s managers and, unlike payday loans, can help borrowers build a credit history. Some employers are also using apps that allow workers to receive access to part of what they earn on a daily basis. The apps allow people to spend money that they just earned as an alternative to payday loans. To date, these apps have been used primarily by chain restaurant employers. Walmart has also followed suit in providing pay advances to workers. App providers typically charge fees each time workers deposit earnings onto debit cards or into bank accounts.

A number of changing social trends that impact personal finances were reported in 2017. Nationally known financial advisor Ric Edelman predicted that retirement planning will soon cease to be financial planners’ main challenge. Rather, increasing longevity will increase clients’ interest in career counseling, continuing education, and maintaining employment viability. America’s growing cultural divide and rural resident immobility also made headlines as did the number of people getting married later and having children out of wedlock more often. In addition, 2017 saw the highest number of grandparents in the U.S. than ever before. The baby boom of 1946-1964 has resulted in a grandparent boom today. There are now 70 million grandparents, a 24 percent increase since 2001. In fact, of all adults over 30, more than 1 in 3 were grandparents as of 2014. One-quarter of grandparents have spent more than $1,000 on their grandchildren in the past year. This figure includes gifts and intergenerational travel experiences.

Universal Basic Income (UBI) is another social trend that was increasingly discussed in 2017. UBI is a payment (salary) provided to adults by a government entity regardless of wealth or employment. Meant to be a substitute for current government transfer systems, it has been proposed as a way to address chronic joblessness that is predicted to worsen due to disruptions caused by technology (i.e., job-destroying robots and artificial intelligence). The UBI concept is being tested in Finland and Oakland, Calif. It was also the subject of a presentation at FinCon 2017, with some questioning whether UBI would disincentivize paid work and others stating that it could free people up to do lower-paying jobs that they really want to do. Another increasing trend is “Shareville,” i.e., an expansion of peer-to-peer sharing options where people rent things instead of buying them (e.g., housing, clothing and accessories, cars, bicycles, boats, RVs, etc.).

Still another recent event with financial implications is the announced phase out of the London Interbank Offered Rate (Libor) which has been used to set interest rates for consumer borrowing. The Libor decision was made due to concerns in the United Kingdom that it was being manipulated. This decision could affect borrowers, lenders, and investors in mortgage securities. Those most likely to be affected are consumers holding adjustable-rate mortgages (ARMs), which were often pegged to the Libor index. 2017 also saw the introduction of “basic economy” seating on U.S. airlines. For savings of about $30, compared to regular economy seats, passengers receive no advance seat selection and can only carry on one personal item. If they show up with a full-sized carry-on bag, they are charged both a bag check fee (e.g., $25) and a gate handling fee (e.g., $25). These fees basically wipe out any fare savings and many flyers are not aware that they apply.

Government Legislation and Policy Changes

During 2017, there were several attempts to repeal and replace the Affordable Care Act (ACA). Nevertheless, Americans (with certain exceptions) were required to follow the law and purchase health insurance. As was the case during the three previous tax years, a tax penalty (called an individual shared responsibility payment by the IRS) will be assessed on 2017 tax returns that are filed in 2018 for Americans who went more than three full consecutive months in 2017 without health insurance. The penalty is calculated as the greater of a flat rate ($695 per adult and $347.50 per child up to a maximum of $2,085) or a percentage (2.5 percent) of household adjusted gross income up to a maximum of the national average price of a Bronze plan sold through the ACA Marketplace. These are the same penalties as 2016 because there was no inflation adjustment in 2017. There will also be no inflation adjustment to the flat fee in 2018. In 2019, as a result of the Tax Cuts and Jobs Act, the individual shared responsibility payment will be $0, meaning that individuals who do not have health insurance in 2019 and later will not have to pay a penatly.

ACA penalties for large employers with 50 or more full-time workers who do not offer health insurance to their workers also continued in 2017. The affordability threshold (percentage of employees’ household income for self-only coverage) has been adjusted annually. It was 9.5 percent in 2014 and 9.69 percent in 2017 and will be 9.56 percent in 2018. For calendar year 2017, the employer shared responsibility payment per employee for not offering minimum essential coverage was adjusted again for inflation from original amounts initially set in 2014. Another ACA change in 2017 was that the federal government will no longer be reimbursing insurers for cost-sharing subsidies, also called “extra savings,” that help low-income households pay deductibles, copayments, and coinsurance.

Insurers are, however, still required by law to provide cost-sharing benefits for people with lower incomes. The expected result is an increase in premiums to make up for lost government payments, which will affect high income earners the most. Another side effect of the decision to end federal government cost-sharing reduction payments has been the growing number of consumers who will qualify for larger federal premium subsidies which, in some cases, will result in free health insurance. Insurers who sell Marketplace plans promoted this to increase the pool of young healthy workers who enroll. The 2017 ACA open enrollment period (11/1/17 to 12/15/17) was shorter than in the past and was marked by some confusion among consumers about the status of the ACA, higher health insurance rates, and curtailed outreach efforts (e.g., local navigators at non-profit organizations).

The open enrollment period for Medicare (10/15/17 to 12/7/17) was different than that for the ACA. The amount that people pay per month for Medicare Part B coverage is based upon household income. Another key factor is whether retirees collect Social Security benefits and have Medicare Part B deducted from their benefit. Those who fall into this category may be protected by the so-called “hold harmless” provision which states that Medicare Part B premiums can’t increase by more than the previous year’s cost-of-living increase for Social Security. Medicare Part B premiums in 2017 were $109 per month for those held harmless and $134 per month or higher (based on modified adjusted gross income) for others. About 70 percent of Medicare beneficiaries were held harmless while the rest were forced to pay higher amounts.

Another 2017 government policy was the end of the myRA retirement savings program, which became available in 2015 to help workers lacking an employer retirement savings plan save for retirement. By the time the Treasury Department announced the end of the myRA savings plan, the government had spent $70 million to market the program, only 20,000 Americans had signed up (a cost of $3,500 per account), and the median account balance was $500.

The Department of Labor (DoL) Fiduciary Rule originally scheduled to take effect in April 2017, went into partial effect in June 2017 but full implementation was pushed back until July 1, 2019 following a court challenge and Office on Management and Budget (OMB) approval of an 18-month delay. The fiduciary rule holds financial professionals who provide retirement planning advice to a fiduciary standard to act in the best interests of their clients. Also in 2017, the Consumer Financial Protection Bureau (CFPB) finalized its payday lending rule. The rule requires lenders to conduct a “full payment test” to ensure that borrowers can repay loans and fees within two weeks while meeting major financial obligations. The rule also caps the number of loans that can be made in quick succession at three and prohibits lenders from debiting a borrower’s account after two unsuccessful attempts at collection.

Military Family Finances

One of the biggest personal finance issues affecting military families is anticipation of the new Blended Retirement System (BRS) that goes into effect on January 1, 2018. Active duty service members with less than 12 years of service on December 31, 2017 have the option of choosing the BRS or staying in the current legacy retirement system (commonly referred to as the High-3 System). An irrevocable decision must be made anytime during calendar year 2018 and no one will be automatically moved to the BRS. Service members who want to stay covered under the current system can simply do nothing. A calculator was developed by the Department of Defense to assist eligible service members to compare the two options. Also during 2017, the Consumer Financial Protection Bureau Office of Servicemember Affairs issued its report Charting Our Course Through the Military Lifecycle. The report includes a graphic model to describe the concept of the lifecycle of a military consumer from enlistment through retirement.

Financial Education Resources

A useful resource that gets updated annually is the College for Financial Planning’s publication Annual Limits Relating to Financial Planning. In a two-page document, indexed numbers for income and estate taxes, retirement savings plans, health savings accounts, marginal tax brackets, Medicare premiums, Social Security rules, and more. For financial planners who conduct educational programs in schools, Next Gen Personal Finance (NGPF) added many new resources in 2017 including an interactive online college decision-making simulation game called Payback with debriefing questions, middle school resources, Spanish translation resources, Questions of the Day, a financial education advocacy toolkit, and FinCamp professional development conferences for teachers. New National Endowment for Financial Education (NEFE) resources in 2017 include financial workshop kits on retirement planning and an updated version of the publication Your Spending, Your Savings, Your Future: A Beginner’s Guide to Financial Readiness. NEFE also updated a number of Smart About Money online courses for consumers on topics that include emergency funds, financial well-being, housing, life events and transitions, and retirement. The courses take about 45 minutes to complete and include additional worksheets, calculators, and quizzes.

Other resources for financial educators and consumers that were developed in 2017 include the following:

  • Lists of curated financial education resources (Rutgers Cooperative Extension)
  • New financial education lesson plans (Rutgers Cooperative Extension)
  • The publication Five Steps for Making Financial Decisions (Consumer Financial Protection Bureau)
  • Personal finance webinars (Consumer Financial Protection Bureau)
  • Personal finance webinars (New Jersey Coalition for Financial Education)
  • Personal finance webinars (Montana State University Solid Finances program)
  • Personal finance webinars (University of Florida/IFAS Extension)
  • Personal finance webinars​ (eXtension Military Families Learning Network)

Looking Ahead to 2018

Modest changes were announced for the Social Security earnings limit, which will increase from $16,920 per year in 2017 to $17,040 per year in 2017. The amount of earnings required to earn a quarter of coverage will increase from $1,300 in 2017 to $1,320 in 2018 and the maximum Social Security benefit from $2,687 to $2,788. Maximum taxable earnings subject to Social Security tax will be $128,700 in 2018, up from $127,200 in 2017. The cost of living adjustment for Social Security benefits in 2018 is 2 percent.

Modest changes were also announced for tax-deferred savings plans. The contribution limit for self-only health savings accounts will increase by $50 in 2018 from $3,400 to $3,450. Family plan contributions will increase by $150 from $6,750 to $6,900 and catch-up contributions ($1,000) will remain the same. The required amount for high deductible health plan (HDHP) deductibles will increase slightly from $1,300 for self-only coverage and $2,600 for a family in 2017 to $1,350 and $2,700, respectively, in 2018. The 2018 contribution limit for flexible spending accounts for health care expenses (health FSAs) is $2,650, up $50 from the 2017 limit of $2,600. Employers may offer one of two available options for unspent Health FSA funds at year-end: a carryover of up to $500 or a grace period through March 15 of the following year.

Contribution limits for tax-deferred retirement savings plans will change slightly. After three years at $18,000, the maximum amount that workers can contribute to a workplace retirement savings plan will rise to $18,500 in 2018. The additional $6,000 maximum catch-up contribution for workers age 50 and older will remain the same for a maximum contribution limit of $24,500 for older workers. The 2017 maximum contribution of $5,500 for an individual retirement account will remain the same in 2018, as will the $1,000 catch-up contribution, for a maximum contribution of $6,500 for workers age 50 or older at year-end.

The biggest news about financial planning in 2018 and beyond is the Tax Cuts and Jobs Act, which was passed by both the U.S. Senate and House of Representatives in late December 2017 and was signed by President Trump on Dec. 22, 2017. This law will impact individual tax payers and businesses on a scale that has not been seen in over 30 years. Below are just some of the tax law changes that were made:

§  Eight-year period of lower individual tax rates from 2018 through 2025 with seven temporary tax rate brackets ranging from 10% to 37%

§  Chained CPI (consumer price index) will be used for future indexing, resulting in lower inflation adjustments than the previous CPI

§  Elimination of personal exemptions (from 2018-2025)

§  Nearly double the standard deduction ($12,000 for singles and $24,000 for married couples filing jointly in 2018)

§  $10,000 cap for state and local tax (SALT) deductions (e.g., state income tax and municipal property tax) for taxpayers who itemize

§  Repeal of all miscellaneous deductions currently (in 2017) subject to the 2% of adjusted gross income (AGI) floor (e.g., union dues, uniform expenses, unreimbursed business expenses, tax preparation fees)

§  Enhanced child tax credit of $2,000 per qualifying child; $1,400 of the credit is refundable

§  The Affordable Care Act shared responsibility payment remains in effect for 2017 and 2018 and is $0 beginning in 2019

§  Lower medical expenses deduction threshold of 7.5% of AGI for tax years 2017 and 2018

§  Retains the alternative minimum tax for individuals with higher AMT exemption amounts from 2018 through 2025

§  529 college savings plan distributions can be used (within the annual limit of $10,000 per student) for private elementary and secondary school expenses and homeschooling expenses

§  Alimony is no longer deductible by spouses who pay or taxable to recipient spouses for divorce decrees signed after December 31, 2018

§  The moving expense deduction is suspended from 2018 through 2025 except for the moving and storage expenses of service members

§  Interest on home equity loans will no longer be deductible from 2018-2025 with no grandfathering for existing home equity loans

§  Tax-deductible interest is capped on mortgage debt (called acquisition indebtedness) up to $750,000 (down from up to $1 million previously) on new mortgages; for mortgages taken out before December 15, 2017, the $1 million limit for mortgage interest remains

§  The estate tax exclusion was raised to $11.2 million for individuals and $22.4 million for married couples (with proper planning to double the individual exemption; i.e., portability) from 2018 through 2025

For a more thorough description and analysis of the Tax Cuts and Jobs Act, see this blog post​ by Michael Kitces.


This article has described dozens of 2017 research findings, trends, and government policy changes related to personal finance, new financial education resources, and anticipated changes in 2018. As the year draws to a close, much uncertainty still remains about the future of the Affordable Care Act (ACA), including the number of Americans who will purchase insurance and future health insurance costs. Future changes in federal income tax write-offs and savings incentives will also affect the bottom line of many American families. In addition, the Tax Cuts and Jobs Act could negatively impact certain industry sectors, such as real estate, states with high tax burdens, and non-profit organizations that count on donations for operating income. With the increase in the standard deduction and the loss or limitation of many itemized deductions, many future charitable contributions will no longer result in a tax deduction. As always, financial practitioners will need to stay current on the ever-changing financial landscape and how it affects their own personal finances and that of their clients.


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