Check out the information on 3.2% + 5% + 5.2% + 6% Social Security Changes in 2024: New Changes Coming Now from this article. Numerous information about 3.2% + 5% + 5.2% + 6% Social Security Changes in 2024: New Changes Coming Now and other notable things are included in this article.
Social Security Changes in 2024
As we know, the Social Security Administration has announced various substantial changes in the Social Security Benefits that are going to be implemented in the upcoming year, i.e., 2024.
The Social Security benefits will be increased for about 66 million Americans in 2024. Additionally, the RET Exempt Amounts, Tax rates, and disability thresholds will also be increased.
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3.2% + 5% + 5.2% + 6% Social Security Changes in 2024
The Social Security Administration previously announced that the COLA will be adjusted to 3.2% in 2024, which will increase the total benefit amounts of many citizens.
For example, if a worker retires at full retirement age, they will receive 3,822 dollars per month in 2024 instead of 3,627 dollars per month.
This slight increase will ultimately increase the total amount received by the beneficiaries per year. The SSI Federal Payment Standard will also undergo change for both individuals and couples.
The SSI Federal Payment Standard for individuals will change from 914 dollars per month to 943 dollars per month. Meanwhile, the SSI Federal Payment Standard for couples will change from 1,371 dollars per month to 1,415 dollars per month in 2024.
After 3.2% COLA is applied in 2024, the benefits of all retired workers will change from 1,848 dollars to 1,907 dollars. The benefits for all disabled workers will also change from 1,489 dollars to 1,537 dollars.
However, the tax rate in 2024 will remain the same as the tax rate in 2023. Please note that the tax rate of employees, i.e., 7.65%, is a combined rate for Medicare and Social Security.
This means that the Social Security part is 6.2%, whereas the Medicare part is 1.45%. One of the most important changes in Social Security in 2024 is maximum taxable earnings.
According to the SSA, the maximum taxable earnings for the OASDI will now become 168,600 dollars from 160,200 dollars. However, there is no limit on the maximum taxable earnings on Medicare.
Another major change in Social Security is the RET Exempt amount. People who are below the full retirement age will get an exemption of 1,860 dollars per month in 2024 instead of 1,770 dollars per month.
People who are at or above the full retirement age will get an exemption of 4,960 dollars per month in 2024 instead of the previous 4,710 dollars per month.
In the case of people under full retirement age, 1 dollar will be withheld for each 2 dollars above the RET exempt amount. Whereas for people at or above the full retirement age, 1 dollar will be withheld for every 3 dollars above the RET exempt amount.
New Changes Coming Now
The recipients of the SSI will see an increase in their monthly payments starting December 29, 2023. People who receive both SSI and Social Security benefits will see more increase in their total benefit amount. This is because they will receive not only an increased SSI benefit but also an increased Social Security benefit.
The full retirement age in the USA is 67 years. This age has remained unchanged since 1960. Although people can start their social security benefits as early as 62, they will not receive full benefits until they reach the full retirement age.
If a person starts their social security benefit at an early age, i.e., under the full retirement age, they will see a reduction in their monthly payments by a small percentage. This reduction will continue to apply until the person reaches the full retirement age.
For example, if a person is aged 62 and receives 1000 dollars as a retirement benefit, their monthly payment will be reduced to 700 dollars. It means that the retirement benefit will be reduced by 30%.
In both cases, starting the benefits before reaching the full retirement age and after reaching the full retirement age, there are pros and cons.
For example, if a person starts their social security benefit before they reach the full retirement age, they will get the benefits for a longer time duration. However, they will be reduced by a small percentage each month.
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But if a person delays starting their social security benefit, they can get delayed retirement credits that will further increase their monthly payments. But they have to wait till they reach a full retirement age.
In addition, people have to consider other additional factors before deciding when to start the social security benefit. This can include their personal circumstances, i.e., whether they need money right now or not, etc.