7 Social Security Shakeups You Need To Be Ready For Heading Into the New Year

zimmytws / Getty Images/iStockphoto

Commitment to Our Readers

GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.

20 Years
Helping You Live Richer

Reviewed
by Experts

Trusted by
Millions of Readers

Social Security is one of the longest-running and most important governmental programs in America, and it is constantly adapting and changing to keep up with economic changes. In fact, Social Security changes so regularly that learning the basics about how the program operates isn’t enough.

You also have to watch out for the annual updates that can affect everything from how much payroll tax gets deducted from your paycheck to how much your benefit will change on a year-to-year basis, among other changes. Here’s a look at the seven Social Security shakeups you need to be ready for heading into the new year.

Cost-of-Living Adjustment

Every year, the Social Security Administration (SSA) adjusts the amount of Social Security payouts in response to rising inflation. This cost-of-living adjustment, or COLA, reached a record level of 8.7% in 2023, but for 2024, the COLA will only be 3.2%, as inflation has fallen.

According to the SSA, this means the average Social Security payout will increase by roughly $50, although it could vary considerably depending on the size of the current benefit.

Disability Bracket Increase

While Social Security is most widely known for the retirement benefits it pays, it’s also an important source of financial security for those who qualify as being disabled. There are a number of qualification requirements for disability benefits, but one of the restrictions is that you can’t earn above a certain amount and still qualify as being disabled. This earnings threshold changes every year. Here are the limits for 2024:

• Non-blind: $1,550 per month, up from $1,470 per month
• Blind: $2,590 per month, up from $2,460 per month
• Trial work period (TWP): $1,110 per month, up from $1,050 per month

Supplemental Security Income Increase

Just like Social Security retirement payouts increase in line with the rate of inflation, so too do Supplemental Security Income (SSI) benefits. The increase for 2024 is the same as with the COLA, or 3.2%. As SSI payments don’t vary per recipient like Social Security retirement benefits do, the SSA publishes a table showing the exact amounts that SSI recipients will get in 2024:

• Eligible individuals will receive $943 per month, or $11,321.49 per year. 
• Eligible couples will receive $1,415 per month, or $16,980.36 per year.
• Essential persons will receive $472, per month, or $5,673.73 per year. 

SSI resource limits remain the same as in 2023, at $2,000 for individuals and $3,000 for couples. However, the SSI student exclusion increases to $2,290 per month, or $9,230 per year, up from $2,220 and $8,950, respectively.

Increase in Social Security Wage Base

Social Security is primarily funded by payroll taxes on current workers. However, there’s a limit to how much of your earnings are subject to Social Security taxes.

This limit, known as the Social Security Wage Base, is also updated every year in response to rising inflation. For 2024, the Social Security Wage Base rises to $168,600. Earnings above this amount are not subject to Social Security taxes. 

Increase in Maximum Benefits When Retiring at Full Retirement Age

For those retiring at full retirement age in 2024, the maximum benefit jumps to $3,822 per month from $3,627.

Change in Retirement Earnings Test Limits

While you’re allowed to work after you file for Social Security benefits, if you earn too much, your payout is temporarily reduced. Specifically, the SSA will reduce your retirement benefit by $1 for every $2 you earn over the limit while you are younger than your full retirement age. In the year you reach full retirement age, the SSA will reduce your payout by $1 for every $3 you earn over the retirement limit. However, a separate limit is used for this calculation.

For 2024, the earnings limit for workers younger than their full retirement age is $22,320, up from $21,240. The earnings limit for workers in the year they reach full retirement age is $59,520, up from $56,520.

Note that as soon as you reach full retirement age, there are no longer any income restrictions of payout reductions. Also, once you reach full retirement age, any payments that have been deducted are reincorporated to your ongoing monthly payments. They are not lost or forfeited.

Latest Updates on Future Social Security Cuts/Potential Insolvency

Every year, the Congressional Budget Office releases data on the solvency of the Social Security program. While ongoing payroll taxes will always continue to fund benefits at least partially, the Trust Funds themselves are currently anticipated to be depleted by 2033.

This means that by 2034, benefits may have to be cut by 25%. While legislative changes can help shore up the system, at the current time, those are the projections made by the CBO.

Share This Article: