There are big Social Security changes for 2024. The highlights (or lowlights) include a very low Cost of Living Increase and aggressive Clawbacks. Let’s get started with this comprehensive report.
Social Security, a pivotal governmental initiative, constantly evolves to align with economic shifts. Understanding its basics isn’t adequate; annual updates play a vital role, impacting aspects from payroll tax deductions to benefit fluctuations. Here are key Social Security modifications to anticipate in the approaching year:
Cost-of-Living Adjustment (COLA):
- In response to inflation, the Social Security Administration (SSA) adjusts payouts annually.
- The COLA, a record 8.7% in 2023, decreases to 3.2% in 2024 due to falling inflation.
- The average payout is set to increase by about $50, contingent on the current benefit’s size.
Disability Bracket Increase (2024): How much you can earn.
- Non-blind: $1,550/month, up from $1,470
- Blind: $2,590/month, up from $2,460
- Trial Work Period (TWP): $1,110/month, up from $1,050
Supplemental Security Income (SSI) Increase (2024):
- Individuals: $943/month, $11,321.49/year
- Couples: $1,415/month, $16,980.36/year
- Essential persons: $472/month, $5,673.73/year
- SSI resource limits remain at $2,000 for individuals and $3,000 for couples.
Social Security Wage Base (2024):
Increased to $168,600; earnings beyond this are exempt from Social Security taxes.
Maximum Benefits at Full Retirement Age (2024):
Jump to $3,822/month from $3,627.
Retirement Earnings Test Limits (2024):
Younger than full retirement age: $22,320, up from $21,240.
Year reaching full retirement age: $59,520, up from $56,520.
Future Social Security Cuts/Potential Insolvency:
Trust Funds may be depleted by 2033, potentially leading to a 25% benefit cut by 2034, as per Congressional Budget Office projections. Legislative changes could influence these outcomes. Stay informed to navigate these shifts effectively.
Warnings for Aggressive Clawbacks:
Social Security clawbacks refer to situations where the Social Security Administration (SSA) demands the return of benefits that were overpaid to recipients. This can occur due to various reasons, such as errors in calculations, changes in recipients’ circumstances, or other factors that lead to an overpayment of benefits. The SSA has the authority to reclaim the excess funds.
Examples of Social Security clawbacks include cases where retirees receive payments they weren’t entitled to, and later, the SSA requires the return of these funds. This process can result in financial challenges for individuals who may have already spent the overpaid amount.
Watchdog groups have warned that some beneficiaries have already received Clawback Notices for many thousands of dollars. In some cases, the Clawbacks have reached six figures.
It’s crucial for recipients to be vigilant about the correct amount of benefits they should receive and promptly address any discrepancies to avoid potential clawbacks.