Navigating Social Security Changes in 2024
“Navigating Social Security Changes in 2024: What You Need to Know”
As we welcome the new year, it’s crucial to stay informed about the various adjustments affecting Social Security in 2024. Beyond the well-known Cost-of-Living Adjustment (COLA), several aspects of Social Security are evolving to align with national trends in prices and wages. Let’s delve into the five key changes that will impact millions of Americans and shape the landscape of Social Security this year.
- COLA Benefit Boost:
While inflation tempered in 2023, a 3.2 percent COLA is set to enhance Social Security benefits in 2024. This translates to an estimated $59 per month increase in the average retirement benefit, elevating it from $1,848 to $1,907 starting in January. Though less substantial than the 2023 adjustment, this increase remains higher than the historical average since the early ’90s. - Medicare Premium Offset:
For those enrolled in Medicare, a potential offset effect comes into play. With the standard monthly Part B rate rising to $174.70 in 2024, approximately $10 will be deducted from the COLA gain. This reversal follows a rare respite in 2023 when a drop in Medicare premiums accompanied the significant COLA increase. - Social Security Taxes:
The 12.4 percent tax funding Social Security on most workers’ incomes sees a threshold increase to $168,600 in 2024, up from $160,200 in 2023. This annual adjustment reflects national wage trends and ensures that only earnings up to the specified limit are subject to Social Security taxes. - Social Security Earnings Test:
For those continuing to work while collecting Social Security, the earnings test sees adjustments in 2024. Beneficiaries who won’t reach full retirement age until later will have $1 withheld for every $2 in work income above $22,320. Those reaching full retirement age in 2024 will experience a withholding of $1 for every $3 in earnings above $59,520 until reaching the milestone. - Qualifying for Benefits:
Earning Social Security credits remains essential for eligibility. In 2024, you earn one credit for $1,730 in earnings, with up to four credits achievable in a year. Accumulating 40 credits over ten years of covered work qualifies individuals for retirement benefits, and the credit requirements for Social Security Disability Insurance (SSDI) vary based on age and medical conditions.
As Social Security undergoes these changes in 2024, staying informed is key to navigating your financial future. Understanding the intricacies of these adjustments will empower you to make informed decisions and ensure financial security.
Mike Brenhaug
