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Here Are The Major Social Security Changes You Should Be Aware Of

Social Security Benefits
Social Security Benefits; Source- Fox Business

You would think that after as long as Social Security, a program would not appear so different from year to year. However, you might be shocked by how many updates the program receives each year. While some great changes are coming for Social Security in 2024, there is also one less-than-favorable adjustment to be mindful of.

Social Security Benefits

Social Security Benefits; Source- NPR

Social Security Benefits

Seniors receiving Social Security benefits witnessed an 8.7% increase in 2023 as a result of rising inflation. Thankfully, inflation has decreased within the last 12 months. Consequently, in 2024, Social Security beneficiaries will receive a reduced COLA. That’s not a negative thing, though. First off, if you exclude the last two years’ Social Security COLAs, a 3.2% increase is rather generous. It also suggests that seniors may soon get some respite from rising living expenses. One potential issue for Social Security beneficiaries’ COLAs in 2024 is an increase in Medicare Part B costs. The usual monthly Part B premium is going up from $164.90 to $174.70 in the new year.

Medicare Part B Premium

The Part B premiums for seniors who are simultaneously enrolled in Medicare and Social Security are automatically subtracted from their monthly payments. Therefore, the $9.80 rise will result in a lower COLA for some seniors. Not only did Social Security receive its highest COLA in many years last year, but Medicare Part B costs remained unchanged. Instead, it declined. All things considered, Social Security beneficiaries won’t gain as much from their COLAs in 2023, but it’s still a respectably large increase. Seniors may collect Social Security benefits concurrently with their earnings from employment. Additionally, you can earn any amount of money when you reach full retirement age (FRA) without worrying about how it would affect your benefits.

Social Security COLA 2024

However, you must be aware of the earnings-test limit if you choose to work and receive benefits concurrently before FRA. The cap will increase in 2024. This implies that there are additional opportunities for you to make money without having any advantages withheld. This year, $21,240 is the earnings-test cap or $56,520 for individuals who meet the FRA threshold. It will increase to $22,320 the following year, or $59,520 for those who reach FRA. Payroll tax income is essential to Social Security’s survival. Employees may not be required to pay Social Security taxes on their entire salary.

Social Security Taxes

Instead, the amount of income that is subject to taxation for that reason is set by a salary cap. The wage ceiling for this year is $160,200. But it will increase to $168,600 the next year. In total, the Social Security tax on an additional $8,400 in earnings will be due to everyone making $168,600 or more. And it’s not exactly a better situation now. On the other hand, if we want to look at it positively, the likelihood that Social Security will continue to operate is higher the more funding it receives. It is not a given that you will be affected by these changes to Social Security. That 3.2% COLA will be applied to your monthly payments if you are receiving benefits. However, if you are unemployed or have already attained FRA, you might not need to worry about the earnings-test limit.


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