The Social Security Administration needs to make changes all the time. Updating to the new circumstances and trying to keep up with the pace of society is fundamental.
80 years ago Social Security benefits looked a lot different. In fact, there has not always been a COLA increase. It was something that started back in 1975 with an 8% boost.
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The 2023 COLA was quite similar since it reached 8.7%. As a matter of fact, it was the highest in 40 years. As it was so high, the 2024 COLA may bring disappointment among millions of Social Security beneficiaries.
Which is the first change in 2024 to Social Security?
Actually, it will start on December 29 with the Supplemental Security Income. And it is the 3.2% COLA increase. By doing so, Social Security will allow beneficiaries get more money every month.
As they get more money, they can continue buying the same things as in the past. Otherwise, they will lose a lot of buying power. SSA claims that the average increase will be of about 50 dollars.
Undoubtedly, this will be much more if you have a large payment. Workers who were higher-earners for 35 years and retired at 70 may collect up to $4,873 from Social Security.
Believe it or not, some seniors will collect up to $4,873 in 2024 said SSA. It is true that it will be a very small percentage of beneficiaries. But they could cash it if they earned the taxable maximum for 35 years and retired late. At 67, the largest check will be $3,822 in 2024.
What other changes will Social Security bring in 2024?
There will be a new maximum taxable income due to the 2024 COLA increase. That means workers will have to pay more taxes if they earn more than $160,200. The new taxable maximum will be $168,600.
#ICYMI More than 71 million Americans will get a 3.2% increase in monthly #SocialSecurity benefits and #SSI payments in 2024. For more info, visit our blog here: https://t.co/2RWlgZ4aL7 #COLA #2024COLA pic.twitter.com/NOY8PDiF8m
— Social Security (@SocialSecurity) October 14, 2023
Thus, this could mean people who earn that much will have to spend more money on taxes. Even if it does not seem to be much, it could be negative if you are short of money.
What is more, workers will need to earn more money to get 1 work credit in 2024. Its price is $1,640 in 2023, but it will soon increase to $1,730. A worker can get a maximum of 4 credits per year.
Social Security will request workers to get at least 40 work credits to get retirement benefits. So that could take at least 10 years to achieve it. Besides, retirees who have other earnings and have not reached full retirement age have a higher limit.
So, in 2024, they can get up to $22,320 for their combined income, up from $21,240 in 2023. Exceeding that limit may imply a $1 reduction for each 2 dollars extra you receive. See SSA for more details.