7 Most Important Numbers To Know About Social Security in 2024
Written by
Vance Cariaga
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Every year the Social Security Administration makes changes to benefits and other program features, and that will be the case in 2024 as well. Most of the headlines have focused on the 3.2% cost-of-living adjustment (COLA). But that’s not the only number to keep an eye on in the new year.
Depending on your age, 2024 could be an important year for Social Security retirement benefits. If you turn 62 this year, you’ll qualify for benefits and will need to decide whether to file for them. You’re usually better off waiting, because the longer you wait, the higher your monthly payment will be.
Depending on your birthdate, you might also reach full retirement age in 2024, which means you’re entitled to your full benefit based on your work record. If you turn 70 this year, you should go ahead and claim your Social Security benefits because this is the age when you maximize your payment and there’s no longer any incentive to wait.
Those are just a few of the numbers to keep an eye on in 2024. Here’s a look at seven of the most important numbers to know about Social Security in 2024.
Cost-of-Living Adjustment
The 3.2% COLA that Social Security recipients will get in 2024 sounds small compared with this year’s 8.7% COLA, but it’s still one of the highest this century. In only seven previous years since 2000 has the annual COLA topped 3.2%. The COLA has been less than 2% in 10 of those years — and there was no COLA on three occasions. More than 66 million retirement beneficiaries will see the 3.2% COLA beginning this month.
Average Benefit
For Social Security retirement beneficiaries, the 3.2% increase will boost the average monthly payment by $59. That’s well down from the $146 monthly boost that Social Security recipients got in 2023 thanks to the 8.7% COLA, which was the biggest in more than 40 years. Those with long-term disabilities will see an average increase of $48 a month in 2024.
Social Security Taxes
The maximum amount of earnings subject to the Social Security payroll tax will increase to $168,600 in 2024 from $160,200 in 2023. Workers pay a 7.65% FICA tax from their paychecks, with 6.2% of that going to Social Security. Employers must also contribute 6.2% to the program. About 6% of workers who pay Social Security taxes have earnings above the taxable maximum each year.
Maximum Benefit
The maximum Social Security benefit for a worker retiring at full retirement age will rise to $3,822 in 2024 from $3,627 in 2023. This affects only those who claim benefits at FRA, which is currently either 66 or 67, depending on your birth year. Those who claim benefits earlier receive smaller monthly payments.
Full Retirement Age
Speaking of the FRA: For people born in 1957, the full retirement age is 66 years and six months, Motley Fool reported. This means if you were born between July 1957 and December 1957, you’ll reach FRA in the first half of 2024. Those born in 1958 have an FRA of 66 and eight months. If your birthdate was between January 1958 and April 1958, you’ll reach FRA in September 2024 and December 2024. Those born in May 1958 or later will have to wait until next year for full benefits.
Medicare Premium
If you are enrolled in Medicare, you probably have premiums for Part B deducted directly from your Social Security payments, according to the AARP. Part B is the federal health care program that covers doctor visits and other outpatient treatment. When Medicare premiums go up, it cuts into your COLA — and those premiums will rise to $174.70 a month in 2024 from $164.90 in 2023.
Earnings Test
Seniors who continue to work after filing for Social Security retirement benefits might be subject to an earnings test if they earn a certain amount of money. In 2024, the earnings exempt from the retirement earnings test will increase to $22,320 from $21,240 in 2023, according to the SSA. For every $2 in earnings above that limit, $1 in benefits will be withheld. These earnings rules no longer apply once you hit full retirement age.
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