3.2% + 5% + 5.2% + 6% Social Security Changes 2024 – What are the New Changes Coming in Year 2024?

Updated on February 23, 2024

In 2024, Social Security payments are set to increase by 3.2% for nearly 70 million Americans. Starting January 2024, retirees can expect a monthly rise of over $50 on average. The Department of Labor uses the Consumer Price Index (CPI-W) to track living costs, and with inflation on the rise, federal benefit rates are climbing. This uptick in prices for goods and services is partly offset by the Cost of Living Adjustment (COLA). Explore this page for details on the 3.2% Social Security Changes in 2024, along with additional adjustments linked to the national average pay index in effect from January 2024.

2024 Social Security Adjustments: 19.4% Increase

In 2024, the Social Security Administration (SSA) plans to increase the cost of living adjustment (COLA) for benefit checks, responding to ongoing inflation. This is part of a series of recent adjustments by Social Security, eagerly anticipated each year by the 70 million people who rely on it.

While this year’s COLA increase is less than the substantial 8.7% rise in the previous year – the largest in over 40 years – any additional income is welcomed by fixed-income recipients. The goal is to counteract the impact of inflation on buying power, with yearly adjustments ensuring Social Security payouts keep up with the rate of inflation.

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Rising Cost of Living Adjustment

According to the latest update from the Social Security Administration (SSA) on changes in 2024, Social Security payment checks are set to increase by 3.2% in the coming year. Starting January 2024, the average retired worker receiving Social Security will see a rise in their payments due to this adjustment, with an anticipated average payout of $1,907 compared to the current $1,848. For couples receiving benefits, the expected joint payout is projected to increase by $94, from $2,939 to $3,033.

Since 1975, the SSA has tied cost-of-living adjustments to the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). The SSA determines the COLA by comparing the third-quarter CPI-W for the current year with that of the previous year and adjusts it based on the variation in the CPI-W between the two years.

USA: Increase in Maximum Taxable Earnings

In 2024, the average monthly payment for a retired worker is expected to increase to $1,907, up by $59 from this year’s $1,827. For a retired couple, the increase will be 3.2%, resulting in a payment of $3,033, up by $94 from this year’s $2,939. These adjustments, as reported by the Social Security Administration, will benefit over 70 million recipients in the USA.

Upcoming Year’s New Changes

As of now, we’re aware that Social Security benefits are set to increase by 3.2% in 2024. The consumer price index for urban wage earners (CPI-W) rose during the third quarters of 2022 and 2023, forming the basis for the 2024 COLA, which considers both historical and current inflation. The Bureau of Labor Statistics has released the September inflation rate, setting the context for the upcoming adjustments.

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Revised individual 2024 benefit amounts for current recipients are expected to be dispatched in early December. However, recipients can access this information earlier by creating a personal online account and opting for SMS or email notifications.

In another development, the Social Security Administration (SSA) announced an increase in the highest amount of wages subject to Social Security tax, or the wage base. It will rise by 5.2% to $168,600 in 2022 from the current base of $160,200. This adjustment, leading to approximately 6% more taxes for each worker, is influenced by changes in the national average pay index rather than the CPI. The Social Security tax rate, determined by Congress, remains at 12.4%, with employers and workers sharing the levy equally, while self-employed individuals cover the entire 12.4%.

3.2% Boost in Social Security Benefits for 2024

Every year brings changes to Social Security, impacting nearly every American, whether they are working or retired. The certainty of change continues in 2024, with a series of planned adjustments that will affect individuals differently. While many of these changes aim to provide financial benefits, some may have the opposite effect.

The Social Security Administration (SSA) has announced a 3.2% Cost of Living Adjustment (COLA). The purpose of this COLA is to safeguard Social Security benefits against losing purchasing power due to inflation. Considering the significant 8.7% increase in 2023, the 3.2% adjustment for the upcoming year is notably less.

 

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