Social Security 2024 COLA: 3 Key Changes to Earnings Limits

Understanding Your 2024 Social Security Increase: We’re Here to Help

If you’re feeling anxious about making ends meet on Social Security, you’re not alone. We know that every dollar counts when you’re living on a fixed income. That’s why we want to help you understand the 2.5% benefit increase coming your way and what it really means for your budget.

Yes, this year’s adjustment is smaller than what we’ve seen recently. We understand that might feel disappointing, especially with groceries and medications still costing so much. But let’s look at the positive side together: that 2.5% increase still means about $50 more each month for the average retiree. That’s $600 over the year that you didn’t have before.

We’ll walk through everything you need to know, step by step. No confusing jargon. Just clear, helpful information to ease your mind about these changes.

Your Monthly Benefits Are Going Up

Starting in January 2024, your Social Security check will be larger thanks to the cost-of-living adjustment. We know you’ve been stretching every penny, and while we wish the increase could be more, this adjustment does recognize that prices have gone up.

Here’s what this means in real numbers. If you’re currently receiving $1,800 per month, your new benefit will be about $1,845. If your benefit is $2,000, it’ll increase to approximately $2,050. Every situation is different, and your exact increase depends on your current benefit amount.

We’ve heard from so many of you about the struggle to cover rising costs. Please know that this adjustment, while modest, is designed to help protect your purchasing power. It’s not perfect, but it’s something.

If You’re Still Working: Important Changes to Know

Many of you have told us you need to keep working to make ends meet. We understand. Maybe you’re helping grandchildren with college costs, or medical bills have piled up. Whatever your reason, working while receiving Social Security is completely valid, and we want to help you understand the new earnings limits.

If you’re receiving benefits before your full retirement age, here’s some good news: you can earn more in 2024 without affecting your benefits. The limit is increasing to $22,320 for the year. That’s about $1,860 per month.

We know the rules about earning limits can feel frustrating. You’ve worked hard your whole life, and now there are limits on how much you can earn? It doesn’t seem fair. But here’s something important to remember: any benefits withheld because of your earnings aren’t lost forever. They’re added back to your monthly payment once you reach full retirement age. Think of it as forced savings that will benefit you later.

Special Rules If You’re Reaching Full Retirement Age

If 2024 is your year to reach full retirement age, congratulations! You’re entering a new phase with more freedom. The earnings limit for you is much higher at $59,520, and it only applies to money you earn before your birthday month.

Even better news: once you hit that magical full retirement age, all earnings limits disappear. You can work as much as you want or need to without any reduction in your Social Security benefits. We know many of you have been counting down to this moment, and it’s finally here.

For those still confused about when you reach full retirement age, we understand. The rules have changed over the years, and it’s not always clear. If you were born in 1958, your full retirement age is 66 and 8 months. Born in 1959? It’s 66 and 10 months. Don’t worry if you need to double-check. That’s what we’re here for.

Understanding the Withholding Rules (They’re Not as Scary as They Sound)

Let’s talk about what happens if you earn over the limits. We know the word “withholding” can cause anxiety, so let’s break it down in a way that hopefully eases your concerns.

If you’re under full retirement age and earn more than $22,320, Social Security will temporarily hold back $1 for every $2 you earn over that amount. So if you earn $24,320 (that’s $2,000 over the limit), they’ll withhold $1,000 from your benefits during the year.

We understand this might feel unfair. You’re working because you need the money, and then they reduce your benefits? But remember what we said earlier: this money comes back to you. When you reach full retirement age, Social Security recalculates your benefit to give you credit for those months when benefits were withheld. Many people are pleasantly surprised by how much their benefit increases.

Changes That Affect Higher Earners

For those of you still working and earning good wages, the maximum taxable earnings for Social Security is increasing to $168,600 in 2024. This means if you earn more than this amount, you’ll pay Social Security taxes on more of your income than before.

We realize this might feel like a burden if you’re affected. But there’s a silver lining: paying more into Social Security now could mean higher benefits later if you’re still building your earnings record. Every year of higher earnings can potentially increase your future benefit amount.

For Those Receiving Disability Benefits

If you’re receiving Social Security disability benefits, we haven’t forgotten about you. The amount you can earn while keeping your benefits is also increasing. In 2024, you can earn up to $1,550 per month ($2,590 if you’re blind) and still receive your full disability benefits.

We understand how challenging it can be to navigate working with a disability. You want to contribute and earn extra income, but you’re worried about losing the benefits you depend on. These increased limits give you a bit more breathing room to work within your capabilities without jeopardizing your financial security.

Making the Most of Your Benefits

We want to share some encouraging thoughts about making these changes work for you:

First, that monthly increase might seem small, but it adds up. Consider setting aside that extra $50 each month if you can. By the end of the year, you’ll have a $600 emergency fund that wasn’t there before.

Second, if you’re working and worried about the earnings limits, remember that staying active and engaged through work has benefits beyond money. It keeps you connected, gives purpose, and might even improve your health.

Third, don’t be afraid to ask for help understanding your specific situation. The Social Security Administration has representatives who can explain how these changes affect you personally. Yes, wait times can be long, but the peace of mind from understanding your benefits is worth it.

You’re Not Alone in This Journey

As we wrap up, we want you to know that millions of Americans are navigating these same changes alongside you. It’s okay to feel uncertain or even frustrated about the complexities of Social Security. The system isn’t perfect, and the increases might not cover all your rising costs.

But you’ve made it this far. You’ve weathered economic storms before, and you’ll get through this too. These benefit increases, while modest, are recognition of your contributions and your continued value to our society.

Remember, your Social Security benefits are yours. You earned them through decades of hard work. These annual adjustments, the earnings limits, and all the rules might seem overwhelming, but they’re designed to protect and preserve your benefits for as long as you need them.

Take care of yourself, ask for help when you need it, and know that better understanding these changes is the first step to making the most of your benefits. You deserve security and dignity in retirement, and we’re here to help you achieve that, one step at a time.