5 Social Security Major Changes as Announced on October 2024

5 Social Security Major Changes as Announced on October 2024 As Normal in every October of every year the U.S. Social Security Administration (SSA) to announce new changes here are the 7 changes announced for October  of this year 2024.

The changes consist of a 3.2% cost-of-living adjustment (COLA) to the monthly benefit amount, an increase in the maximum earnings subject to the Social Security tax, a rise in disability benefits, and more.

1. A new cost of living adjustment (COLA) is coming in 2025

Retirement benefits are usually subject to a cost-of-living adjustment (COLA). Here are a few current COLAS:

Although those COLAs may seem small, even a $60 monthly increase adds up to $720 more in a year. The increased advantage is sustained into subsequent years and typically rises much more. Even though the cost of living adjustment percentage will only be announced in October, according to the most recent estimate from the Senior Citizens League. On October 10, the Social Security Administration’s website is expected to disclose the real figure.

Keep in mind that if you want to receive the maximum overall income from Social Security, it’s generally a good idea to wait until you’re 70 years old before beginning to collect payments. Additionally, it will optimize your benefit, meaning that each COLA you get will bring in more money. A three percent rise on a $2,500 payout would include $75 more, whereas a three percent increase on a $2,000 benefit would mean $60 more.

2. The earnings test limit will rise nearly up to $60,000

The Social Security earnings limit is another number that increases each year. It applies if you collect Social Security benefits before your full retirement age while still working and earning money. (That’s 67 for those born in 1960 or later, and 66 or 67 for most people.). If this describes you, be aware that Social Security will only reduce your payments if you earn a certain amount of money.

If you don’t reach full retirement age this year, Social Security will reduce your monthly payments by $1 for every $2 you earn above $22,320 in 2024. The threshold is a more generous $59,520 for people who reach full retirement age this year; benefits are reduced by $1 for every $3 over the cap. However, Social Security will make adjustments to your future benefits to make up for the withholding, so don’t panic too much. to avoid financial loss.

3. The earnings limit will rise next year

Not all income is subject to Social Security taxes, as you may not be aware. After a certain amount, earnings are not subject to taxation. For most people, the cap—which is $168,600 for 2024—is unaffordable. This implies that the tax payment to Social Security for an individual earning $168,600 and another one earning, let’s say, $33,168,600, will be equal. It should come as no surprise that many individuals find this to be unjust. One proposed (among many) strategy to bolster Social Security is to remove this cap. We’ll probably find out the new figure in October, but the wage cap in 2025 is probably going to be higher.

4. Maximum Social Security benefits will also increase

You can have your Social Security benefits increased in several ways, but the amount you can have increased is limited.  Currently, beneficiaries who meet the full retirement conditions and qualify for the maximum benefit payment can expect to receive up to $45,864 per year, which means earning $3,822 per month.  It will be slightly higher in 2025. It’s very difficult to get the maximum benefit in either scenario, but you can increase your benefits slightly by waiting until you’re 70 to claim them. Very difficult. Almost impossible.

5. More states may decide not to impose taxes on Social Security income

In 2017, 37 states didn’t tax their residents’ Social Security benefits, with Kansas, Missouri, and Nevada joining the list. More recently, 41 states and the District of Columbia don’t tax Social Security, even though the federal government does. For instance, 42 or 43 states will likely follow suit in the next few years.