How Will Payments Be Made in 2024 and What Are the Biggest Changes?

How Will Payments Be Made in 2024 and What Are the Biggest Changes? The Social Security landscape is poised for adjustments in 2024, bringing notable changes that will impact millions of Americans. Among these changes, the Cost-of-Living Adjustment (COLA) takes center stage, projecting a 3.2 percent increase, resulting in an average monthly raise of $59 for beneficiaries. While this figure marks a decrease from the previous year’s 8.7 percent, it remains above the historical average since the 1990s.

Impact of Medicare Premiums on Net Gains

A significant factor affecting the net gain from COLA is the anticipated rise in Medicare premiums. These premiums, directly deducted from Social Security payments, will see the standard monthly Part B rate increase from $164.90 to $174.70, offsetting the benefit boost by approximately $10 per month.

Changes in Social Security Taxes and Income Thresholds

Despite Social Security taxes remaining at 12.4 percent, the income threshold subject to taxation is set to increase to $168,600 in 2024, up from $160,200 in the previous year. This adjustment reflects ongoing efforts to sustain and fund the Social Security benefits system.

Adjustments for Social Security Disability Insurance (SSDI) Recipients

SSDI recipients can expect higher income limits in 2024, with the threshold set at $1,550 per month for most beneficiaries and $2,590 for those receiving SSDI based on blindness. The criteria for earning Social Security credits, essential for retirement benefits eligibility, will also see an increase to $1,730 per credit in 2024.

Qualifying for Social Security Benefits

Understanding the qualification criteria for Social Security benefits is crucial. Individuals can earn up to four credits a year, requiring a total of 40 credits or ten years of covered work for eligibility. Additionally, the qualification for SSDI depends on accumulated credits, ranging from six to 40, depending on the age when a medical condition interrupts work.

Social Security Payment Distribution Schedule for 2024

When are Payments Being Made?

The 3.2 percent COLA increase for Social Security and Supplemental Security Income (SSI) payments in January 2024 will be distributed on staggered dates. Due to January 1, 2024, being a holiday, the initial increased SSI payment is advanced and scheduled for Friday, Dec. 29, 2023.

Subsequent payments will be sent on the following dates:

• January 3: For those receiving benefits before May 1997.
• January 10: For beneficiaries with a birth date from the 1st to the 10th.
• January 17: For those with birth dates from the 11th to the 20th.
• January 24: For beneficiaries with birth dates from the 21st to the 31st.

Conclusion

Social Security landscape for 2024 brings both challenges and opportunities for beneficiaries. The 3.2 percent COLA increase, coupled with adjustments in premiums and income thresholds, underscores the need for informed financial planning to navigate the evolving dynamics of social security benefits.