Social Security recipients likely already know that their benefits get a bump almost every year to counteract the effect of inflation. But that cost-of-living adjustment is just one of several annual tweaks to the Social Security system.
These changes affect folks who are already retired as well as those who have yet to retire.
Following is a look at what will change for 2024.
1. The check-in options
The Social Security Administration recently announced that visitors to local offices have the option to check in on their phone, a feature called Mobile Check-In Express.
Essentially, you can save yourself a spot in line by simply using your phone to scan a QR code at your local Social Security office. Once you check in by phone, you’ll receive an electronic ticket telling you your place in line, and you’ll receive an alert on your phone when it’s your turn.
2. The COLA
Social Security recipients will see their monthly benefit payments rise by 3.2% in 2024, as we detailed in “Social Security Checks To See a Modest Increase in 2024.”
That cost-of-living adjustment (COLA) translates to an extra $59 a month, based on the current average Social Security payment for retired workers.
For some folks, though, the extra income may be offset by higher taxes.
3. The Medicare premium offset
The premium for Medicare Part B health insurance is withheld from many retirees’ Social Security payments. As a result, the annual COLA increase to Social Security payments effectively is offset by the annual increase in Part B premiums.
In 2024, the average Social Security retirement benefit will increase by around $59 per month, while the typical Part B premium will increase by $9.80 per month. So the Social Security COLA increase will be diminished: The average retiree will only receive about $49 more in benefits each month if their Part B premium is withheld from their Social Security payments.
4. The earnings limit for working retirees
If you claim Social Security retirement benefits before reaching your full retirement age and also continue working, the Social Security Administration will withhold some of your benefits if your income exceeds what’s known as the earnings limit. (There is no penalty for earnings made while working after you reach full retirement age.)
This earnings limit generally increases annually as the national average wage index increases. For 2024, it will rise:
- From $21,240 to $22,320 if you will reach full retirement age after 2024
- From $56,520 to $59,520 if you will reach full retirement age in 2024
The Social Security Administration notes, however, that you do not lose any benefits that are withheld due to your income exceeding the applicable earnings limit. Once you reach your full retirement age, your monthly benefit is increased permanently to account for months in which benefits were withheld.
5. The tax cap on workers’ income
Here’s another annual adjustment based on the increase in average wages: The maximum amount of a worker’s income that is subject to Social Security payroll taxes will rise from $160,200 in 2023 to $168,600 in 2024.
So, if you’re fortunate enough to earn more than $168,600 in 2024, you won’t owe Social Security payroll taxes on every dollar you earn.
The Social Security payroll tax rate itself does not change annually and thus will remain the same in 2024: 6.2% for employees (employers pay another 6.2% on their employees’ behalf) and 12.4% for the self-employed.
6. The earnings required for one credit
Not everyone is eligible for Social Security retirement benefits. As we explain in “6 Groups Who Can’t Count on Social Security Benefits“:
“To receive Social Security retirement benefits, most people need to accumulate at least 40 ‘credits’ during their working lifetime, according to the U.S. Social Security Administration (SSA). Currently, you can earn up to four credits per year if you work and pay Social Security taxes.”
The earnings required for you to receive one Social Security credit, also known as one-quarter of coverage, will rise from $1,640 in 2023 to $1,730 in 2024.
7. The maximum benefit
There is a limit to how much money a retiree can receive in monthly benefits. It’s known as the maximum Social Security benefit.
Your maximum Social Security benefit depends on the age at which you retire. The maximum benefit for someone who retires at their full retirement age will rise from $3,627 per month in 2023 to $3,822 per month in 2024.
Add a Comment
Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.