Changes in Social Security benefits are not very common to see in the United States. The checks sent out by the Administration, month to month, are usually the same across the board. If a retiree gets a $1,000 payment on the second Wednesday in October, it is possible that the same thing will happen again in November.
However, from year to year things can change. Starting in January, a new year begins and with it will come changes in Social Security payments. These changes will be for all beneficiaries, regardless of the type of benefit you have and the amount.
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So if you have an accepted Social Security check you may be interested to know that there will be two major changes that may earn you more money but, on very limited occasions, could lose you money.
In general, no retirement benefit recipient should worry about the downside of these changes, but it is something that everyone should be aware of. And that’s because if there’s a downside, we’re likely to run into it sooner or later. When will you get your next Social Security check?
SOCIAL SECURITY CHANGES IN 2024
The two Social Security changes are related to the Cost of Living Adjustment, or COLA. And is that this increase will cause there to be major changes within benefits starting January 1st, 2024.
The first of these major changes is the COLA itself. Through this benefit adjustment, retirees will have access to a larger Social Security check. We don’t know the exact figure yet, but we may see a 3.2% increase in overall benefits. So, the first change brings us more money and is very good news.
However, there is the second of these changes to consider. This other change can be very important for a large number of retirees. Considering that the taxable income threshold has not been changed, it is possible that this COLA increase could cause us to lose money in taxes.
By having more monthly income we could exceed the non-taxable income threshold, which would ultimately make the COLA Social Security increase a rebate due to taxes. Still, if you collect only your retirement check as your only source of income you should not be concerned. This concern is for all retirees who have some other source of income.
Other changes in Social Security payments in 2024
In addition to the changes we have seen, in 2024, we will have other changes related to Social Security payments that will be unveiled before the end of the year. One example is individuals with higher net worth.
Individuals with greater resources may anticipate an increase in the maximum monthly amount to which they are entitled. However, for those with higher incomes, this implies that their potential retirement rewards may be somewhat more substantial. To be more precise, the monthly payment cap at full retirement age (when you can opt to get 100% of your retirement benefit) will experience another increase in 2024.
In the current year, the maximum amount a beneficiary could expect to get each month at full retirement age is $3,627. By 2024, workers retiring at full retirement age will be able to enjoy a monthly payment of up to $3,822, which represents a significant increase of $195 per month.
It is relevant to note that only 2% of Social Security beneficiaries meet the requirements to obtain this maximum monthly payment, which includes:
1. having a work history of at least 35 years.
2. Opting to claim benefits upon reaching full retirement age.
3. The Social Security Administration (SSA) takes into account meeting or exceeding the maximum taxable earnings limit during the 35 years when calculating the beneficiaries’ monthly benefit.