What You Can Expect From Social Security in 2024. Social Security remains a crucial source of income for millions of older adults, with many relying heavily on these benefits during retirement.
According to a 2023 report from the Nationwide Retirement Institute, approximately 1 in 5 adults aged 50 and older have no alternative retirement income outside of Social Security.
Positive Outlook for Retirees in 2024
In the upcoming year, retirees can look forward to an increase in their benefits, starting in January 2024. While Social Security beneficiaries experienced an impressive 8.7% Cost-of-Living Adjustment (COLA) in 2023—the highest in four decades—2024 will see a more moderate 3.2% COLA. This adjustment, linked to inflation, suggests a slower inflation rate in 2023 compared to the previous year.
Despite the smaller adjustment, this is good news for retirees. Lower inflation implies reduced costs, which can have a more significant impact on retirement than a larger COLA. The new COLA will come into effect in January 2024, with the average retired worker seeing their monthly benefit rise from $1,848 to $1,907—a $59 increase.
Additional Changes on the Horizon
The benefit increase is just one of several changes awaiting retirees in 2024. Notable adjustments include:
Higher Maximum Benefit
In 2023, the maximum Social Security benefit stands at $4,555 per month. However, starting in 2024, this maximum will rise significantly to $4,873 per month, marking a substantial $318 monthly difference.
Higher Maximum Taxable Earnings Limit
The maximum taxable earnings limit, the income subject to Social Security taxes, will increase to $168,600 per year in 2024, up from $160,200 per year in 2023. This figure is crucial for those aiming to maximize their monthly benefits.
Increased Payments for Other Beneficiaries
In 2024, the COLA is not exclusive to retirees. All Social Security beneficiaries, including disabled workers, widows(er)s, and spouses collecting spousal benefits, will experience higher payments next year.
Higher Earnings Test Limits
Workers can expect higher earnings test limits in 2024. If you continue working after claiming Social Security and haven’t reached your full retirement age, higher income limits mean reduced chances of benefit reductions, potentially resulting in higher monthly payments.
Social Security, a lifeline for many older adults, sees annual benefit increases that significantly impact retirees. Understanding what to expect in 2024 allows for better preparation in managing one budget.
Conclusion
Social Security beneficiaries can anticipate a 3.2% increase in benefits in 2024, alongside other positive changes. These adjustments, coupled with higher maximums and earnings limits, underscore the ongoing importance of Social Security as a vital financial support for retirees and beneficiaries.
