These are the most important changes to Social Security for 2024
There will be some changes that could affect Social Security payments for next year including COLA, Medicare, among others. Learn more about what they are.
The year is about to end and it is the best time to take into account and prepare for the changes in Social Security that will take effect next year, as these could affect your monthly benefits.
Both the program and payments are affected each year by some factors, including the cost of living adjustment (COLA), Medicare premiums, and maximum taxable income, which may increase or decrease the amount that a beneficiary receives each month.
These are the most important changes to Social Security for 2024.
Cost of Living Adjustment (COLA)
Every year in October, the Social Security Administration calculates the cost of living adjustment (COLA), which represents an increase to monthly payments. The COLA is calculated for benefits to keep up with inflation and to avoid affecting the purchasing power of beneficiaries.
The COLA is linked to the annual increase in the Consumer Price Index for Urban Wage Workers and Clerical Workers (CPI-W). The SSA takes into account the CPI-W data from the third quarter of the previous year and compares it with that of the third quarter of the current year and if there has been an increase, the SSA increases the benefits. The COLA for 2024 is 3.2%.
New payment amounts
Thanks to the COLA, monthly payments will increase by 3.2%. This year, the average payments for all retired workers have been $1,848, according to the SSA. With a 3.2% increase they would be $1,907 in 2024.
Meanwhile, the average payments for elderly couples, where both receive benefits, have been $2,939. With the COLA they would increase to around $3,033.
In the case of Supplemental Security Income (SSI), the standard federal payment will increase from $914 to $943 for individuals and from $1,371 to $1,415 for couples. Other Social Security payments would look like this for 2024, according to the SSA:
Maximum payment amounts
The maximum benefit for those who retire at their full retirement age will be $3,822 per month. This amount does not depend on the COLA.
Full retirement age is the age recommended by the SSA to receive full Social Security payments, that is, 100% of what each retired worker is entitled to.
The full retirement age depends on the worker's year of birth. If he or she was born between 1943 and 1954, it is 66 years old. If you were born between 1955 and 1959, the full retirement age gradually increases until it reaches age 67 for those born from 1960 onwards.
Maximum taxable payment increases
To receive the maximum monthly payment, you must meet certain criteria. One of them is that you must pay Social Security payroll taxes on the maximum taxable income in your 35 highest-earning years.
Like the COLA, the taxable income limits change each year. This amount is linked to the national average salary index, so it tends to increase from one year to the next.
In 2023, only the first $160,200 have been subject to these taxes. In 2024, the maximum income will be $168,600, meaning more of a worker’s income will be subject to the tax.
Medicare Part B Premium
Social Security benefits are affected by Medicare, as the Part B premium is deducted from monthly checks. Medicare Part B monthly premiums will increase to $174.70 in 2024. The annual deductible will be $240 next year.