4 Key Social Security Changes Expected in 2024. As we approach the dawn of 2024, several notable modifications are slated to affect the Social Security Administration (SSA) benefits and the overall system. These changes will impact a broad spectrum of individuals, from current beneficiaries to prospective retirees. Let’s delve into these forthcoming transformations:
1. COLA Adjustment – Boosting Social Security Benefits
In 2024, Social Security beneficiaries will witness an increase in their monthly payouts due to the Cost-of-Living Adjustment (COLA). The COLA hike for the year is projected to be 3.2%, reflecting the current inflationary trends. While some may find this increase modest, it is a significant development that retirees will have to embrace.
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2. Wage Cap Elevation
The wage cap, another pivotal factor in Social Security, is set to rise in 2024. This alteration will benefit current workers, as it determines the extent to which they are required to pay taxes on their earnings. In 2023, any income exceeding $160,200 remained untaxed. However, come 2024, this limit will ascend to $168,600, subjecting an additional $8,400 to taxation. Consequently, the Social Security Administration will accrue greater tax revenue.
3. Earnings-Test Limit Adjustment
Another change on the horizon pertains to the earnings-test limit. This limit affects retirees who simultaneously earn income while collecting Social Security benefits. In 2023, the threshold stood at $21,240 annually. Beginning in 2024, this limit will escalate to $22,320. If your combined income from both your benefits and job falls below this threshold, you won’t incur additional taxes. However, exceeding this limit will result in a reduction of $1 for every $2 or $3 earned over the threshold, contingent upon your specific retirement benefit.
4. Enhanced Work Credits Requirements
Earning work credits is an essential requirement for obtaining a monthly Social Security check. Starting in 2024, this process will become more demanding. While the total number of credits needed will remain the same, each credit will necessitate a higher income threshold. To earn a work credit, one must accrue $1,730 in income, up from the 2023 requirement of $1,640.
Final Words
These changes will usher in a new fiscal year for Social Security, encompassing both current beneficiaries and those planning for retirement. With the COLA adjustment, wage cap hike, earnings-test limit modification, and more stringent work credits requirements, the landscape of Social Security will evolve significantly in 2024. It is crucial for individuals at every stage of their Social Security journey to stay informed and adapt to these impending alterations.
