3.2% + 5% + 5.2% + 6% Social Security Changes 2024 | New Changes Coming Soon

3.2% + 5% + 5.2% + 6% Social Security Changes 2024 | New Changes Coming Soon

3.2% + 5% + 5.2% + 6% Social Security Changes 2024 | New Changes Coming Soon. In anticipation of the upcoming year, 2024, the Social Security Administration has revealed noteworthy changes to Social Security benefits affecting a substantial portion of the American population. The alterations encompass enhancements to benefits, adjustments in the RET Exempt Amounts, modifications in tax rates, and revisions to disability thresholds.

3.2% + 5% + 5.2% + 6% Social Security Changes 2024

A significant highlight of the upcoming Social Security changes is the Cost of Living Adjustment (COLA), set at 3.2% for the year 2024. This adjustment will result in an increase in the total benefit amounts received by millions of beneficiaries. Notably, the adjustments will impact various categories, including retired workers, disabled workers, and recipients of Supplemental Security Income (SSI).

COLA Impact on Specific Benefits

Retired workers, for instance, retiring at full retirement age, can expect an increase in their monthly benefits from $3,627 to $3,822 in 2024. Similarly, disabled workers will witness a change from $1,489 to $1,537. Moreover, SSI Federal Payment Standards for individuals and couples will see respective adjustments to $943 and $1,415 per month.

Tax Rates and Maximum Taxable Earnings

While the tax rate for Social Security remains constant at 6.2%, the maximum taxable earnings for Old-Age, Survivors, and Disability Insurance (OASDI) will experience an increase from $160,200 to $168,600. Notably, the tax rate constitutes both Social Security and Medicare components.

RET Exempt Amount Changes

A noteworthy modification in Social Security pertains to the Retirement Earnings Test (RET) Exempt Amount. Individuals below full retirement age will enjoy an exemption of $1,860 per month, an increase from the previous $1,770. Conversely, those at or above full retirement age will see an exemption rise to $4,960 from $4,710 per month.

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Anticipated Changes for SSI Recipients

Commencing December 29, 2023, recipients of Supplemental Security Income (SSI) are set to witness an increase in their monthly payments. Those receiving both SSI and Social Security benefits will experience a cumulative boost in their total benefit amounts, incorporating adjustments to both SSI and Social Security benefits.

Full Retirement Age Considerations

As a constant since 1960, the full retirement age in the United States remains at 67 years. Despite the option to commence Social Security benefits at 62, recipients will not receive full benefits until reaching the full retirement age. Initiating benefits earlier results in a reduction in monthly payments, a factor that persists until reaching the full retirement age.

Weighing the Pros and Cons

The decision of when to commence Social Security benefits involves weighing the pros and cons. Initiating benefits early provides a longer duration of benefits, albeit at a reduced percentage each month. Conversely, delaying benefits results in delayed retirement credits, ultimately leading to higher monthly payments upon reaching the full retirement age.

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