If you are a recipient of Social Security or Supplemental Security Income (SSI), this article might interest you. The Social Security Administration has recently announced a 3.2% increase in benefits for 2024.
In this blog post, we will try to explain what this increase means for you.
2024 Cost-of-Living Adjustment
Starting from January 2024, people who receive Social Security benefits will get a 3.2% increase in their payments. This is known as a cost-of-living adjustment (COLA). A COLA is a periodic increase in benefits that is designed to help beneficiaries keep up with the changes in the cost of living.
How Much Will Your Benefits Increase?
The amount of your benefit increase will depend on your current benefit amount and the type of benefit you receive:
- the maximum income that can be taxed for Social Security will rise to $168,600,
- if you’re younger than the full retirement age, you can earn up to $22,320 without it affecting your benefits; if you earn more than this, your benefits will be reduced by $1 for every $2 you earn above this limit,
- if you reach your full retirement age in 2024, you can earn up to $59,520 without it affecting your benefits; if you earn more than this, your benefits will be reduced by $1 for every $3 you earn above this limit, until the month you reach full retirement age,
- once you’re at full retirement age for the whole year, there’s no limit on how much you can earn.
For example, if you are a retired worker who receives an average monthly benefit of $1,548 in 2023, you will see an increase of $50 per month in 2024.
When Will You Receive Your Increased Benefits?
You will receive your increased benefits starting with your January 2024 payment.
How Will This Affect Your Taxes?
The increase in your benefits may affect your taxes if your total income exceeds certain thresholds. This is because you have to pay taxes of 50% or even up to 85% (for higher income) of your Social Security benefits if your combined income, calculated per the Social Security Taxable Benefits Worksheet exceeds $25,000 if you file as an individual or $32,000 if you file a joint return.
We hope this blog post has been helpful and informative for you.
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This material is for informational purposes only. It does not constitute tax, legal or accounting advice.