5 significant social security alterations in January of 2024.

5 significant social security alterations in January of 2024.

January of 2024

Washington, D.C. - The Social Security Administration (SSA) announced five significant alterations to the way Social Security benefits are distributed in January of 2024. The alterations affect both current and potential recipients.

Increase the benefits

The greatest alteration is an increase in Social Security benefits of 5.9%. This is the greatest increase since 1982. The increase is derived from the Consumer Price Index (CPI), which calculates inflation.

The increase is applied to all of Social Security's benefits, including retirement, disability, and survival benefits. This also covers benefits associated with Supplemental Security Income (SSI).

Later retirement credits are increased.

Also in January of 2024, the delayed retirement credits (DRCs) increased as well. Extra benefits called DRCs are given to people who postpone their retirement date past the full age of retirement (FRA).

The annual increase in DRC is 8% for every year someone goes on to work after their formal retirement. This implies that someone who waits until age 70 to retire will have a 32% increase in benefits over the FRA if they do so.

COLA Increases

The cost of living adjustment (COLA) also increased in January of 2024. The COLA is a price-based measure of inflation that is employed to modify the Social Security benefits annually.

The predicted rate of inflation for 2024 is 5.9%, which is the highest increase since 1982. This implies that Social Security benefits will increase by 5.9% in January of 2025.

Earnings Test Increase

The income test also increased in January of 2024. The earnings test specifies the maximum income that Social Security recipients can have while still receiving their benefits.

The income test for beneficiaries with age 67 or younger is $19,560. For those over 67, the earnings test is $48,600.

Increase in Age of Retirement

The age of retirement increased as well in January of 2024. The retirement age is the age at which people can receive all of Social Security.

The average age of retirement for individuals born in 1960 is 67 years and 6 months. Those born in 1961 have a retirement age of 67 years and 9 months. The age of retirement will increase at a slow rate until it is 67 years for everyone in 2034.

The five significant alterations to Social Security benefits in January of 2024 will have a significant impact on current and future recipients. The increases in benefits will compensate for the effects of inflation, while the other alterations will have an effect on the maximum income people can receive and when they can retire.