Among the forthcoming alterations, there’s a mix of positive shifts and particular adjustments that might sting the hardest.
In 2024, significant Social Security changes are on the horizon, reflecting the enduring truth that change remains a constant
Firstly, the majority of Social Security changes are beneficial. Beneficiaries can expect a 3.2% annual cost-of-living adjustment (COLA), although lower than the prior year’s 8.7% increase, it still surpasses the average of the last decade. The maximum retired worker benefit is also on the rise, climbing from $3,627 to $3,822 per month.
Moreover, there are improvements for those starting Social Security before their full retirement age (FRA) and continuing to work. The annual earnings limit for 2024 will increase to $22,320, up from $21,240, offering more leeway before benefits are reduced. Similarly, Social Security changes for disabled individuals working while receiving benefits will raise their earnings thresholds.
The most significant alteration comes through the Social Security payroll tax cap
Last year, earnings up to $160,200 were taxed at a rate of 6.2%, totaling roughly $9,932 for individuals and nearly $19,865 for self-employed individuals. In 2024, this ceiling rises to $168,600, potentially resulting in the government collecting an additional $521 or more from certain individuals and doubling for those self-employed.
Despite these adjustments, it’s crucial to highlight that the majority of Americans won’t experience a substantial impact from these Social Security changes, as median household incomes in the U.S. typically remain well below these specified limits.
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