Social Security Changes for 2024: How They Impact Your Benefits. The upcoming year, 2024, brings significant changes to Social Security, affecting both positively and negatively the benefits of its beneficiaries. These changes are essential to adapt to evolving circumstances and societal demands.
Evolution of Social Security Benefits
Social Security benefits have evolved over the past 80 years, and one notable change occurred in 1975 when the Cost of Living Adjustment (COLA) was introduced, resulting in an 8% boost. The 2023 COLA, which reached an impressive 8.7%, was the highest in four decades. However, the 2024 COLA may disappoint many Social Security beneficiaries due to its potential impact on their financial well-being.
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The First 2024 Change: Supplemental Security Income
The first significant change for 2024 begins on December 29 with the introduction of a 3.2% COLA increase for Supplemental Security Income. This increase will allow beneficiaries to receive more money every month, maintaining their purchasing power. On average, beneficiaries can expect an additional $50 per month. Those who were higher-earners for 35 years and retired at age 70 may collect up to $4,873 in Social Security benefits.
Other Changes in 2024
Apart from the COLA increase, there are additional changes in store for Social Security in 2024:
- Maximum Taxable Income: The 2024 COLA increase also raises the maximum taxable income, requiring workers to pay more in taxes if they earn over $160,200. The new taxable maximum will be $168,600, potentially impacting higher-income earners.
- Earning Work Credits: Workers will need to earn more money to obtain work credits in 2024, as the price of one work credit increases from $1,640 in 2023 to $1,730. To qualify for retirement benefits, Social Security will require workers to accumulate at least 40 work credits, which may take a minimum of 10 years. Additionally, retirees with other income sources who have not reached full retirement age will face a higher limit on their combined income, allowing them to receive up to $22,320 in 2024, up from $21,240 in 2023. Exceeding this limit may result in a $1 reduction for every $2 of additional income received.
These changes highlight the dynamic nature of Social Security and its continuous efforts to adapt to the evolving needs and circumstances of beneficiaries, while also potentially impacting the financial well-being of individuals at various income levels. For more details on these changes, you can refer to the Social Security Administration (SSA).
