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2024 Social Security Changes Explained

February 12, 20242 min read

2024 Social Security Changes Explained: COLA, Earnings Limits, & More

Written by: Angelica Roxas

Your Retirement Secure?

New Social Security Rules You Can’t Ignore (But Don’t Panic!)

For millions of Americans, Social Security represents a vital foundation for financial security in retirement or during times of disability.

2024 brings some key changes to this essential program, impacting both beneficiaries and contributors. Buckle up, here’s your guide to what’s new:

Bigger Checks, But Also Bigger Bite

  • Cost-of-Living Adjustment (COLA):

Good news!

Your monthly checks get a boost!

Social Security and Supplemental Security Income (SSI) recipients will see a 3.2% increase in benefits thanks to the 2024 COLA.

This translates to an average monthly bump of over $50. However, remember, inflation is a double-edged sword. While your benefits increase, so will the cost of everyday items.

  • Taxable Maximum Rises:

If you’re a high earner, brace yourself for slightly higher payroll deductions.

The maximum amount subject to Social Security tax (the “taxable maximum”) climbs to $168,600 in 2024, from $160,200 in 2023.

This means you’ll pay Social Security tax on every dollar you earn up to that limit, resulting in a bigger tax bill for top earners.

Earnings and Benefits

  • Retirement Earnings Test Bump:

For those working before reaching full retirement age (FRA), the earnings limit before they face benefit reductions increases to $22,320 from $21,240.

However, keep in mind that the penalty remains: for every $2 earned above this limit, $1 in benefits is withheld.

  • FRA-Year Earnings Threshold Update:

If you reach FRA in 2024, the earnings limit where your benefits stop reducing is now $59,520, up from $56,520. Once you hit this threshold, there’s no more penalty, even if you continue working.

Other Noteworthy Changes

  • Supplemental Security Income (SSI) Recipients:

SSI beneficiaries also get a 3.2% COLA increase in their payments.

  • Disability Thresholds:

The “Substantial Gainful Activity” (SGA) thresholds for Social Security disability benefits rise due to the COLA.

Staying Informed

Facing changes in Social Security? Visit the SSA website or call 1-800-772-1213 for info. For personalized help, consult experts like Strategic Asset Preservation (SAP) here. They’ll guide you through Social Security updates and optimize your retirement plans for a secure financial future.

We will steer you through Social Security updates and tailor your retirement plans for a solid financial future. Plus, schedule a complimentary strategy session with Angelica Roxas, Fiduciary Advisor, at Calendly for added guidance.

Remember, these changes are just one piece of the larger Social Security puzzle. It’s always wise to consult with a financial advisor or retirement planning expert to create a personalized strategy for your unique circumstances.

With an understanding of the changes and proactive planning, you can face the new year and its Social Security updates with confidence, knowing your financial future remains secure.

Sources:

  • https://www.ssa.gov/

  • https://www.ssa.gov/cola/

  • https://www.ssa.gov/myaccount/

  • https://www.ssa.gov/retirement

  • https://www.aarp.org/retirement/social-security/

  • https://www.ncoa.org/index.htm

  • https://www.cbpp.org/

  • https://www.nasdaq.com/articles/6-changes-coming-to-social-security-in-2024-and-who-could-be-affected-most

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