It is the job of the Social Security Administration to send monthly Social Security checks to more than 71 million retired workers, widows, disabled people, and people who get Supplemental Security Income (SSI). Even though Social Security has been around for a long time.
The rules for the program are often updated to keep up with new trends. We’re lucky that way because changes to Social Security could give retirees big rewards. Still, people who get Social Security benefits need to know that not all of the changes have been good. The plan changed three times in 2024, for better or worse.
Notable changes to Social Security checks in 2024 that you may have missed
Monthly checks got a 3.2% raise from the annual COLA
Social Security benefits are changed every year by the cost of living, which is also written as a COLA. COLAs are meant to help people who get Social Security keep their buying power as the cost of living rises due to inflation. In 2024, Social Security payments will go up by 3.2%. The average monthly income will go up from $1,848 at the end of 2023 to $1,907 at the start of 2024 because of this.
The Social Security COLA for next year will probably be less than this year, though. It is too early to find this number because COLAs are based on inflation data from the third quarter. But early estimates show that the COLA will be 2.57 percent in 2025, which is a lot less than the increase seniors got earlier this year.
The good thing about COLAs going down is that it means inflation is slowing down. So, retirees will gain because their costs shouldn’t go up as quickly as they have in the past, even if Social Security payments don’t go up as much in 2025.
The wage cap thresholds increased for beneficiaries
Since the wage cap levels have changed, people who get Social Security may not have to pay taxes on all of their salary if their income is higher. It decides how much of a person’s income can be taxed each year to pay for the program.
It’s important to remember that the most you could earn in 2023 was $160,200. This year, though, it was raised to $168,600. People in the US pay Social Security taxes on the full amount of their income because it is less than the cap. This means that many people will not be affected.
Also, people who make more money should be ready for the chance that the wage cap will go up in 2025. Since the beginning of 2024, a lot has changed with Social Security. The program is also set to go through some big changes in 2025. Both workers and seniors need to know about changes to Social Security so they don’t get unpleasant surprises.
The earnings-test limit also rose in 2024
No longer do you have to worry about the earnings test once you hit full retirement age. The cap on earnings only applies if you work and get benefits before you reach full retirement age.
Basically, this limit tells you how much money you can make each month before some of it is taken out. In 2023, the maximum amount of money that seniors under full retirement age could earn was $21,240. It went up to $22,320 this year.
Someone who hasn’t hit full retirement age yet but wants to before the end of the year must follow a different set of rules. It was $56,520 in 2023, but it went up to $59,520 in 2024. Seniors should know about delayed benefits, though, because if they make more than the earnings test limit.
Some of their benefits may be taken away. It’s important to know what the limit is. But benefits that were denied are not lost forever. When adults reach their full retirement age, they start getting their monthly benefits again.