What are the 2024 Changes to Social Security?
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Today’s question is all about changes when it comes to Social Security now that we’re into the 2024 tax year.
Well, folks, there are a lot of changes. You don’t need me to tell you that the Social Security Administration is under a lot of stress right now. Well, why is that? We are at the peak of the Baby Boomer wave, which means there are 14,000 people turning 65 every single day. This is a trend that’s going to continue for the next 10 years or more.
I tell you this because there are going to be changes coming out almost every single year when it comes to Social Security. So, let’s just hit on two of them.
Cost-of-Living Adjustment (COLA)
Now that we’re into 2024, the most common change that people have questions about is the good old Cost-of-Living Adjustment, or COLA. What is it? It’s the IRS’s way to acknowledge the fact that the world we live in is just getting more and more expensive every day.
As a result, if you’re collecting Social Security, you’re going to notice your check probably just got a little bit bigger. That number has been as high as 14 to 15% in previous years. Last year, it was over 8%. For 2024, the COLA is just over 3% – it’s 3.2%. So, you’ll see that raise in your accounts.
Income Subject to Social Security Taxes
The last thing I want to talk about is the earnings threshold at which Social Security taxes are being taken out of your paycheck. If you’re still working, they’ve actually increased those limits. It used to be a pretty low limit where some high-income earners were only paying into the system on a very small amount of their income. They’ve increased that limit to $168,000. So, if you’re working, you pay taxes into the Social Security system on dollars up to $168,000 in income.
So, a lot of changes are coming. I’d anticipate there are going to be more coming down the pike as the years go on, but those are two that you need to be aware of now that we’re into 2024.
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