Big Social Security Changes Coming in 2024 | How Will They Affect You. For more than 48 million retired individuals, Social Security is a vital lifeline, aiding in the payment of bills and lifting millions out of poverty annually. However, the dynamic nature of this popular retirement program calls for continuous adjustments to account for changes in lifespan, inflation rates, and various other factors.
Social Security Changes in 2024
In 2024, six significant changes are set to take effect in Social Security, prompting the need for a thorough examination of how these changes will impact beneficiaries. Key highlights include strong clawbacks and a notably low cost-of-living increase.
Evolution of Social Security in the USA
Over decades, Social Security has provided stable income for retirees, adapting to changes through annual adjustments by the Social Security Administration (SSA). These adjustments, including the Cost of Living Adjustment (COLA), impact a range of beneficiaries, from those receiving SSDI and SSI to early retirement benefits and disability payments from the VA.
6 Big Social Security Changes in 2024
1. Rise in Cost of Living Adjustment (COLA)
The anticipated 3.2% COLA for 2024, though lower than previous years, is expected to result in a significant increase in retirement payments. Social Security experts project a $59 monthly increase for retirement beneficiaries and a $48 increase for those with LTD.
2. More Tax on Income
The maximum salary subject to Social Security taxes is set to increase to $168,600 in 2024, affecting the portion of an employee’s salary liable to taxes. This adjustment is in response to the overall increase in average American salaries.
3. Maximum Social Security Benefit Increase
The highest payout for employees reaching full retirement age will rise from $3,627 to $3,822. Different maximums apply for those retiring before or after the full retirement age of 67.
4. Benefits for Spouses and Disabled Workers
Benefits for spouses and disabled workers, based on average lifetime wages, are expected to increase. The average monthly disability payment is projected to rise from $1,489 to $1,537 by 2024.
5. Social Security Changes for Retirees
Monthly Social Security and Supplemental Security Income payments for seniors will increase by 3.2%, providing a boost to retirees. This increase is based on the Consumer Price Index from the third quarter of 2022 to the third quarter of 2023.
6. How to Determine Your 2024 Benefit Amount
Beneficiaries can ascertain their precise COLA amount and 2024 disability payments by signing into their my Social Security account in December 2023. Additionally, the SSA will mail a letter outlining the 2024 cost-of-living adjustment, unless the beneficiary has opted out of physical mail updates.
Conclusion
As Social Security undergoes significant changes in 2024, staying informed about these adjustments is crucial for beneficiaries. Whether it’s understanding the COLA impact or the increase in maximum benefits, being aware of these modifications ensures a proactive approach to financial planning for retirees and other Social Security recipients.
