Every year brings changes to our social security. While it may be less critical when you are younger, when you are approaching retirement, changes can affect your budget, lifestyle, and quality of life.

Social Security COLA

Cost of Living Adjustments ( COLA) are directly tied to annual inflation. We all know that inflation affects our buying power and ability to pay fixed-budget expenses like rent or mortgage payments, utilities, and food. If your budget depends on fixed income such as social security, it is a welcome relief that your social security check will also increase in times of higher inflation.

The 2024 COLA increase is 3.2% compared to the 8.7% increase in 2023. It is significantly lower this year, increasing the average monthly social security check by $59 because inflation has slowed considerably. This year’s increase is also higher than the average monthly increase of 2.9%.

Social Security Earnings Limits

Your income is taxed for social security up to an increased limit of $168,600. While most Americans are taxed through the entire year for Social Security deductions, nearly 17 million Americans earn more than $170,000, and those making more than $1 million per year stopped paying into Social Security.

If you are still working and have not reached the full retirement age of 66.5 years, the maximum amount you can earn is $22,320, and on each $2 after that amount, $1 will be withheld for Social Security. The total income you can earn while taking Social Security before full retirement age is $59,520. There is no limit to your income after you reach full retirement age.

Medicare Premium Offset Returns

Last year, Medicare Part B premiums deducted from your social security check each month were lower than the year before, a rare break from the annual increase in premium deduction amounts. In 2024, the premium increase is back, with an increase from the standard premium 2023 deduction of $164.90 to a deduction of $174.70 in 2024.

For additional information on Social Security and this year’s changes, visit the United States Social Security website.

Tom Tuohy
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TomTuohy.com
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This news post has been created for information and planning purposes. It is not intended to be, nor should it be substituted for, legal advice, which turns on specific facts and laws in specific jurisdictions. No reader of this article should act or refrain from acting based on any information included in, or accessible through, this article without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from a lawyer licensed in the reader’s state, country or other appropriate licensing jurisdiction.

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