The Social Security Administration will bring new changes to the program. As a matter of fact, they are not just about the Cost of Living Adjustment increase for 2024. Obviously, this may be the part that most American beneficiaries may be keen to learn first. But there is a lot more.
It will be on December 29 when Supplemental Security Income (SSI) beneficiaries receive their new COLA. The will be the first that will get the 3.2% COLA increase from Social Security. Luckily, the amount of money you pay from your payroll to the Administration will be the same if you are not a high earner.
However, if your earnings are $168,600, you will have to pay more money to Social Security. That is the new taxable maximum for 2024, up from $160,200 in 2023. The percentage will continue to be 6.20%, but the cap is higher.
What will be the new maximum amount for Social Security at Full Retirement Age?
The largest Social Security at Full Retirement Age will be $3,822 in 2024. The maximum amount at this stage is $3,627 in 2023. Therefore, those who reach the normal retirement age and qualify will receive a larger payment.
Social Security has also announced the new maximum amounts for Supplemental Security Income. On average, they may get about 21 dollars extra. But the largest amount possible is $943, up from $914.
Essential persons can also receive an SSI payment from Social Security. For your information, the amounts for 2024 will also increase. They can receive up to $472 in 2024, up from $458 in 2023.
If you would like to apply for SSI, there have been no changes regarding the resource limits. It will remain $2,000 per individual and $3,000 per couple. Let’s move on to other important changes that Social Security has announced in the latest Fact Sheet.
Work credits or Social Security credits will need more earnings
If you are working and paying taxes to Social Security, you can get retirement or disability benefits. However, you will need to have at least 40 work credits to get retirement checks at the age of 62. The price of a single work credit is $1,640 of earnings in 2023.
So, workers whose earnings are equal to $6,560 or more can receive 4 work credits in 2023. Therefore, you will need to work for at least ten years to qualify. That is the main reason why some workers may not qualify. They may have not paid taxes or their earnings were too low to qualify for work credits.
The amount of earnings you will need to get one work credit will be $1,730 in 2024. These are not the only things that have gone up, although the following update is a positive one.
The retirement earnings test exempt amounts have also increased. So you can have more earnings and still not pay more taxes. That is for those workers under full retirement age. So be careful if you are 62 years old on Social Security and working.
The new maximum amount is $22,320 in 2024, up from $21,240. SSA will withhold $1 for every $2 of earnings you go over the new limit. Thus, it is of vital importance that you stick to the new amounts not to get a reduction in retirement benefits.