These 6 Social Security Changes Will Affect Your Payments in 2024

RETIREMENT - SOCIAL SECURITY
Decode the implications of the latest Social Security revisions on your retirement income.
Updated May 8, 2024
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Millions of people depend on Social Security during retirement. Perhaps you also hope to stretch your Social Security income as far as possible so you can have a comfortable retirement.

Unfortunately, Social Security can be confusing. From cost-of-living adjustments to changes in Medicare premiums, many factors can impact your benefits.

Here are some key changes to benefits you need to know about to help you understand how much you'll receive from Social Security in 2024.

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The 2024 Social Security COLA is 3.2%

gunnar3000/Adobe social security benefits form on table

In 2023, inflation was somewhat subdued compared to the previous year. However, consumer prices still rose, resulting in a 3.2% cost of living adjustment (COLA) for Social Security recipients.

As a result, the average Social Security benefit increased by $59 per month in 2024, from $1,848 to $1,907. It's essential to consider how this adjustment will impact your overall financial situation and your ability to retire stress-free.

Medicare premiums are $9.80 higher

Vitalii Vodolazskyi/Adobe medicare premiums sticky note

For those enrolled in Medicare, premiums for Part B — which covers doctor visits and outpatient treatments — are typically deducted directly from Social Security payments.

The monthly Part B premium has increased from $164.90 in 2023 to $174.70 in 2024. That $9.80 increase is likely to come out of your Social Security benefit, offsetting a bit of the gains from the COLA adjustment.

The Social Security earnings test threshold has increased

JohnKwan/Adobe Social Security and retirement income

Individuals who collect Social Security while continuing to work before reaching full retirement age may see a portion of their benefits withheld depending on how much they earn.

In 2024, beneficiaries who haven’t reached full retirement age and are still working will have $1 withheld for every $2 in work income they receive above $22,320. In 2023, that amount was $21,240.

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Social Security disability benefits income thresholds are higher

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Social Security Disability Insurance (SSDI) recipients must meet income requirements to maintain eligibility for benefits. In 2024, the threshold for most SSDI beneficiaries is an income of $1,550 per month, up from $1,470 in 2023.

For those receiving SSDI due to blindness, the limit increases to $2,590 per month, up from $2,460 in 2023.

Spousal benefits are rising

chuck/Adobe social security card with calculator

Mothers who have been widowed and who have two children have seen their spousal benefits rise from an average of $3,540 a month in 2023 to $3,653 a month in 2024.

For aged widows and widowers living alone, average benefits have risen from $1,718 a month in 2023 to $1,773 a month this year.

You may pay more taxes on your benefit income

Sara Robinson/Adobe woman exhausted while calculating taxes

Social Security benefits may be subject to federal taxes. The amount that's taxed is based on your combined income, which includes the sum of half your benefits plus total adjusted gross income and nontaxable interest.

For individual tax filers, up to 50% of benefits may be taxable if they have a combined income between $25,000 and $34,000. For couples filing jointly, this range is between $32,000 and $44,000.

If you earn above these thresholds, up to 85% of benefits may be taxable.

Those thresholds remain unchanged from year to year. That means that as your benefit income increases yearly with COLA adjustments, more of it may become taxable. That makes it harder to boost your bank account.

Bottom line

Syda Productions/Adobe senior woman with papers

Social Security may seem complex, but understanding these changes can help you make informed financial decisions.

Equipping yourself with knowledge about cost-of-living adjustments, Medicare, and taxes allows you to avoid making mistakes and create a more secure retirement.

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Author Details

Adam Palasciano Adam Palasciano is a personal finance-obsessed and money-savvy individual who loves to hash out content on all things saving money. He specializes in writing millennial-friendly personal finance content, covering topics ranging from trending financial news, debt, credit cards, cryptocurrency, and more.

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