Social Security is like a moving target – it changes every year, and in 2024, there are a few shifts that will touch just about everyone, whether you’re working or retired. Some changes will bring more money your way, but a couple might not be so great.
The big news is a cost-of-living increase (COLA) that kicks in come January 2024. Now, it won’t be as hefty as the 8.7% bump in 2023 due to this year’s lower inflation rate.
That’s just one tweak in Social Security for 2024. Let’s check out six of these changes and see who’ll be feeling the impact the most.
Social Security Changes in 2024
1. COLA Increase
In 2024, the COLA (Cost-of-Living Adjustment) is set at 3.2%, which is a bit lower than this year’s increase but still higher than the average over the past couple of decades, which was 2.6%. This will affect everyone getting Social Security, but the impact varies based on your benefit type and when you started claiming it.
For folks on Social Security retirement, the 3.2% bump means an average monthly increase of $59. If you have long-term disabilities, you’ll see an average raise of $48 a month.
2. The maximum Social Security benefit will rise.
The maximum Social Security benefit for someone retiring at full retirement age (either 66 or 67, depending on your birth year) will increase to $3,822 in 2024 from $3,627 in 2023. This only affects those who claim benefits at the full retirement age; if you claim earlier, your monthly payments will be smaller.
3. More money will be taxed.
Another change is that more income will be taxed. The maximum earnings subject to the Social Security payroll tax will go up to $168,600 in 2024 from $160,200 in 2023. This mainly affects those with higher salaries. Workers pay a 7.65% FICA tax from their paychecks, with 6.2% of that going to Social Security. About 6% of workers who pay Social Security taxes earn more than the taxable maximum each year.
4. Higher Earnings Test
If you keep working after getting Social Security retirement benefits, there’s a chance you might face an earnings test based on your income. In 2024, the earnings exempt from this test will go up to $22,320 from $21,240 in 2023. Here’s how it works: for every $2 you earn above this limit, $1 in benefits gets held back. These rules don’t apply anymore once you reach full retirement age.
5. Higher SSI Payment Standards
For those getting Supplemental Security Income (SSI) along with Social Security, the SSI Federal Payment Standard will increase to $943 a month in 2024 from $914 in 2023. If you’re a couple, the standard will go up to $1,415 a month from $1,371.
6. Spousal and Disability Benefits Will Be Bigger
Widowed mothers with two kids will see their average benefits go up to $3,653 a month in 2024 from $3,540 in 2023. For widows and widowers living alone, the average benefits will rise to $1,773 a month from $1,718. If you’re a disabled worker with a spouse and one or more kids, your average monthly benefit will increase to $2,720 from $2,636.
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