When a new year begins we can always see change in many agencies in the United States and Social Security is one of them. Thus, Americans who collect a monthly Social Security will see certain changes in their benefit. And not only that, other citizens who are not yet collecting retirement payment will also see major changes.
Not only beneficiaries, whether disability or survivor, will see changes in the Social Security system. Even workers who are planning their benefit will see some major changes within everything retirement related. And this will affect both their present and their future, as it relates to the type of benefit they will get later in life.
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The normal thing is to think that the COLA is the only thing that will change benefits starting next year. But nothing could be further from the truth, as there are three other important changes to keep in mind at all times. While it is true that not all changes affect all citizens all of these changes do affect American society in general.
If you are currently collecting Social Security you already know that you will be getting a little extra money starting next year, which is good news. So pay attention to the rest of the changes in case they affect you directly.
4 IMPORTANT CHANGES TO SOCIAL SECURITY IN 2024
The first of these changes is the COLA, which will increase benefits. Similarly, the wage cap will also increase in 2024. Likewise, we also have the earnings-test limit increasing and the value of working credits, like the other elements, is also increasing.
Let’s take a closer look at each of these elements.
SOCIAL SECURITY BENEFIFTS INCREASE DUE TO COLA
In total, the COLA increase for 2024 will be 3.2%. Many retirees predicted this, as did many industry experts. For some it’s a pretty low increase, but looking at the inflation trend it may seem sufficient. Still, there is no way to change it, so retirees will have to settle for this increase.
The maximum check in 2024 will be $4,700 or so. This will be the maximum Social Security check in total, i.e., from all categories joined to the SSA. Each citizen will have a different check depending on their current retirement check.
WAGE CAP INCREASE
The Wage Cap will also see an increase in the coming year 2024. This increase will result in current workers not having to pay taxes on each and every dollar they earn on the job.
In this regard, in the current year any salary over $160,200 did not have to pay any more taxes. Now, the limit in 2024 will be set at $168,600. So there is a difference of more than $8,000 that will be paying taxes and, therefore, the Social Security Administration will be able to collect more money in taxes.
SOCIAL SECURITY EARNINGS-TEST LIMIT ON THE RISE
Retirees who work and collect Social Security at the same time will have a small change with respect to taxes. It is very common for many Americans to do this, but there are certain limits. In 2023, the maximum is $21,240 in wages per year.
Starting next year 2024 that limit goes to $22,320. So if between your benefit and your salary you earn less than that money you should not pay any extra tax.
In the event that you exceed the limits, your Social Security benefit will be $1 less for every $2 or $3 earned above the limit, depending on the retirement benefit itself.
WORK CREDITS VALUE WILL RISE
If we must earn 40 work credits as a minimum to get a monthly Social Security check, starting next year 2024 this task will be a bit more difficult. While it is true that the number of credits will be the same, earning each one will require more work.
In order to get a work credit, starting next year we will need to earn $1,730 in income. This is much higher than the current year 2023, where the requirement is to earn $1,640.