Everything has changed in Social Security in 2024

Even though Social Security may not seem like a fascinating subject, as you age, you should want to learn as much as you can about it unless you’re independently wealthy. From the Social Security Administration, take note of this: Ninety percent or more of the income for twelve percent of males and fifteen percent of women who are 65 years of age or older comes from Social Security.

Furthermore, among those who get benefits, 42% of women and 37% of men receive at least 50% of their income from Social Security. In August, the average monthly retirement payments from the SSA was only $1,920, or roughly $23,000 yearly. While receive millions more, that amount is still average. Even better, different restrictions are adjusted, and benefit checks generally increase over time.

5 new changes that will come to Social Security in 2024

A new cost of living adjustment (COLA) increase is coming in 2025

Retirement benefits are typically subject to a cost of living adjustment (COLA). Below are a few current COLAS:

Year	COLA increase
2015	1.70%
2016	0%
2017	0.30%
2018	2%
2019	2.80%
2020	1.60%
2021	1.30%
2022	5.90%
2023	8.70%
2024	3.20%

Although these COLAs may seem small, even a $60 monthly increase adds up to $720 more in a year. The increased benefit is carried over into subsequent years and typically increases much more. According to the Senior Citizens League, the latest estimate is 2.5%. The Social Security Administration’s website should have the real number on October 10.

Keep in mind that if you want to get the maximum total income from Social Security, it’s generally a good idea to wait until you’re 70 to start taking payments. In addition, this will optimize your benefit, meaning that each COLA you receive will bring in more money. A three percent increase on a $2,500 benefit would mean $75 more, while a three percent increase on a $2,000 benefit would mean $60 more.

Beneficiaries will see their earnings limit increase in 2025

You may not be aware that not all earnings are subject to Social Security taxes. There is a limit above which earnings are not taxed. Most individuals cannot afford the threshold, which stands at $168,600 in 2024. This means that the same amount of tax is paid into the system by someone who earns $168,600 and someone who earns, say, $33,168,600. As one can expect, many people view this as unjust. Removing this cap is one proposed strategy to strengthen Social Security, among others. The pay cap is expected to rise in 2025, and the new figure will most likely be announced in October.

The earnings-test limit will also rise next year

The earnings-test limit on Social Security is another number that rises annually. It applies if you collect retirement benefits before reaching full retirement age while still working and generating money. (That’s 67 for those born in or after 1960 and 66 or 67 for the majority of individuals.). If you fall into such a category, be aware that Social Security will only reduce your benefit to a certain amount of money you can earn.

In 2024, if you do not achieve full retirement age this year, the federal agency will lower your monthly benefits by $1 for every $2 over $22,320 in earnings. Moreover, for those reaching full retirement age this year, the threshold is a more generous $59,520, with benefits lowered by $1 for every $3 earned over the maximum. Don’t worry too much, though; Social Security will modify your future benefits to account for the withholding. So you won’t lose money.

The maximum monthly benefit will increase in 2025

There are numerous ways to boost yours Social Security paymentsbut they are not endless. Every year, there is a maximum benefit, which in 2024 is $3,822 per month ($45,864 per year) for people who claim benefits at their full retirement age. For 2025, it will be slightly higher. You can increase your benefits by delaying claiming until you reach the age of 70, but both options make it difficult to maximize your advantages. It’s really hard. Almost impossible.

Social Security income may not be taxable in some states

In 2017, 37 states did not tax Social Security benefits. That figure has been increasing, with Kansas, Missouri, and Nevada entering the list in recent years. Currently, 41 states and the District of Columbia do not tax Social Security. There’s a good probability it will reach 42 or 43 in a few years.