Social Security and SSI benefits will rise 3.2%, meaning over 71 million recipients will see an average bump of $50 in their monthly retirement checks starting in January. Those receiving SSI will get their increased payments starting from December 29, 2023.

Cost of Living 2024

Over 71 million Americans can breathe a sigh of relief! The Social Security Administration announced a 3.2% boost to Social Security and SSI benefits starting in 2024. This translates to an average bump of over $50 monthly for Social Security retirees, a welcome buffer against rising costs.

The increase, known as a cost-of-living adjustment (COLA), will reach over 66 million Social Security beneficiaries in January, while those receiving SSI will see their payments rise starting December 29th.

Cost-of-Living Adjustment (COLA) 3.2% increase for Social Security and SSI beneficiaries
Effective January 2024
Tax Rates No change for Social Security and Medicare tax rates
Social Security tax rate: 7.65%
Medicare tax rate: 1.45%
An additional 0.9% Medicare tax for high earners remains
Maximum Taxable Earnings Social Security (OASDI): $168,600
Medicare (HI): Unlimited
Retirement Earnings Test Exempt Under full retirement age: $22,320/year ($1,860/month)
Full retirement age: $59,520/year ($4,960/month)
Social Security Disability Thresholds SGA for non-blind: $1,550/month
SGA for blind: $2,590/month
Maximum Social Security Benefit Worker retiring at full retirement age: $3,822/month
SSI Federal Payment Standard Individual: $943/month
Couple: $1,415/month
Estimated Average Monthly Benefits All Retired Workers: $1,907 after COLA
Aged Couple (Both Receiving Benefits): $3,033 after COLA

But good news extends beyond direct payments. The average wage increase also triggers adjustments to other Social Security figures. The maximum income subject to the Social Security tax, for example, will jump from $160,200 to $168,600.

2024 Social Security Earnings

Good news for American workers! The Social Security Administration has announced some adjustments to earnings limits for 2024, offering more flexibility and potentially higher taxable amounts depending on your age and retirement status.

Cost of Living 2024

  • The maximum amount of income subject to Social Security tax is rising to a comfortable $168,600 in 2024, up from $160,200 in 2023.
  • For those not yet at full retirement age, the earnings limit before benefits are reduced is increasing to $22,320. Once you exceed this amount, $1 is deducted from your benefits for every $2 earned above it. So, earn strategically to maximize your overall income.
  • If you reach full retirement age in 2024, you’ll have a higher earnings limit of $59,520 before benefits are reduced. However, keep in mind that for every $3 earned above this limit until you reach full retirement age, $1 will be deducted from your benefits.

COLA Calculation:

Wondering how the COLA is determined? Look no further than the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). This index, measured by the Department of Labor, tracks changes in the prices of goods and services typically purchased by wage earners.

The annual COLA increase is directly tied to the rise in this index. In short, the 3.2% COLA for 2024 reflects the increased cost of living faced by millions of Americans. While it might not completely offset inflation, it offers a significant step towards maintaining financial stability in the new year.

2024 Social Security Changes after COLA Increase

Cost-of-Living Adjustment (COLA):

  • 3.2% increase for Social Security and SSI beneficiaries.
  • Effective January 2024.

Tax Rates:

  • No change for Social Security and Medicare tax rates (7.65% and 1.45% respectively).
  • An additional 0.9% Medicare tax for high earners ($200,000+ for individuals, $250,000+ for married couples filing jointly) remains in effect.

Maximum Taxable Earnings:

  • Social Security (OASDI) increases to $168,600.
  • Medicare (HI) remains unlimited.

Retirement Earnings Test Exempt Amounts:

  • Under full retirement age: $22,320/year ($1,860/month).
  • Full retirement age: applies only to earnings before attaining full retirement age, with a $59,520/year ($4,960/month) limit.

Social Security Disability Thresholds:

  • Substantial Gainful Activity (SGA) for non-blind increases to $1,550/month.
  • SGA for the blind increases to $2,590/month.

Maximum Social Security Benefit:

  • Worker retiring at full retandement age: $3,822/month.

SSI Federal Payment Standard:

  • Individual: $943/month.
  • Couple: $1,415/month.

Estimated Average Monthly Social Security Benefits:

  • All Retired Workers: $1,907 after COLA.
  • Aged Couple (Both Receiving Benefits): $3,033 after COLA.

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