2024 Social Security Changes: What You Need to Know

Every year, Social Security undergoes adjustments that impact the lives of millions of Americans.

While the cost-of-living adjustment (COLA) often grabs the headlines, several other aspects of the program change to reflect shifts in national prices and wages. 

Key Social Security Changes for 2024

Every year, Social Security undergoes adjustments that impact the lives of millions of Americans.

Here are five important ways Social Security will be different in 2024:

1. COLA Benefit Boost:

In 2023, inflation cooled but still led to a 3.2 percent COLA for Social Security beneficiaries. This resulted in an estimated average retirement benefit increase of $59 per month, raising it from $1,848 to $1,907 starting in January 2024. 

Although smaller than the 2023 COLA of 8.7 percent, the 2024 bump remains higher than the historical average of around 2.5 percent.

2. Medicare Premium Offset:

For those enrolled in Medicare, premiums for Part B are often deducted directly from Social Security payments. 

In 2024, the standard monthly Part B rate rises from $164.90 to $174.70, reducing the COLA gain by approximately $10 per month.

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3. Social Security Taxes:

The 12.4 percent tax that funds Social Security benefits is paid by most workers, with half withheld from paychecks and the rest covered by employers. 

In 2024, the income threshold subject to this tax increases to $168,600, up from $160,200 in 2023.

4. Social Security Earnings Test:

The earnings test affects those who collect Social Security and continue to work before reaching full retirement age. 

Beneficiaries not yet at full retirement age will have $1 withheld from their Social Security payment for every $2 in work income above $22,320 (up from $21,240 in 2023). 

Those reaching full retirement age in 2024 will have $1 withheld for every $3 in earnings above $59,520 (up from $56,520 in 2023).

5. Qualifying for Benefits:

To become eligible for retirement benefits, individuals must accumulate Social Security credits through covered work. In 2024, one credit is earned for every $1,730 in earnings, up from $1,640 in 2023. 

A maximum of four credits, equivalent to $6,920 in work income in 2024, can be earned in a year. It takes 40 credits or ten years of covered work to qualify for retirement benefits.

These changes reflect ongoing adjustments to Social Security that affect both beneficiaries and the workforce, emphasizing the importance of staying informed about evolving program rules and regulations.

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