As millions of Americans no doubt marked Jan. 1, 2023 with resolutions for self-improvement for the year ahead, changes to the federal government’s main social welfare safety net are also taking effect this year.
The news is mostly good for those already receiving money from the program. Additional boosts will allow recipients to keep pace with inflation-fueled costs for food, gas and other everyday spending.
But for everyone still paying their dues? The changes may be a little less welcome. Here’s what they’ll mean for you — whether you’re decades into or decades away from retirement.
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Cost of living adjustment: Let’s get a COLA
The most impactful change in 2023 is the 8.7% cost of living adjustment, or COLA, which takes effect this month. For instance, if you receive $2,000 a month from Social Security, the monthly payout will rise to $2,174 per month.
This year's COLA marks the highest percentage jump since 1981’s 11.2% rise, and is tied to the blistering inflationary pressures that have driven up daily costs for every American.
Wait the max, get the max
This year, the government plans to reward the patient Americans who hold off on claiming their benefits until they reach the full retirement age (FRA) of 67. On average, beneficiaries who didn’t wait until the FRA will see their checks increase by about $140 a month next year.
But those who hold off on claiming their benefits until 67 will see their monthly checks go up by $282 to $3,627 a month.
The Social Security Administration has tied its cost-of-living increases to the Consumer Price Index. So while the big COLA was inevitable, it’s welcome nonetheless.
But remember these increases likely won’t help beneficiaries recover the extra costs incurred in 2022. Inflation — while easing in recent weeks — remains high enough that the Federal Reserve still plans rate increases this year.
Higher earners will pay more
Now for the bit of mixed news (depending on your income bracket.) Because Social Security gets most of its money from payroll taxes, the program will dig deeper into the paychecks of high earners.
Before 2023, the maximum earnings subject to Social Security taxes was $147,000.
Beginning this year, employees who make more than $160,200 will have to pay taxes on an additional $13,200 of income.
Full retirement age stays the same
When it comes to Social Security, the system continues to reward patience. The full retirement age of 67 is staying the same this year.
And the max benefit changes happening on the older end of the beneficiary age spectrum only confirm the value in holding off until you absolutely need Social Security. While seniors can tap their Social Security benefits at 62, delaying will gain you increasingly more money per month.
Simply waiting to claim until 67 can earn you a delayed retirement credit of up to 8% of your yearly benefits on top of the maximum benefit amount.
Keep in mind it also pays to investigate spousal and survivor options, including current married couples taking the lower earner’s benefits first, and delaying the benefits of the highest earner. The AARP Social Security Resource Center is a helpful resource for understanding Social Security timelines.
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For 2023, the Supplemental Security Income (SSI) FBR is $914 per month for an eligible individual and $1,371 per month for an eligible couple. For 2023, the amount of earnings that will have no effect on eligibility or benefits for SSI beneficiaries who are students under age 22 is $8,950 a year.
The fundamental goal of $4800 social security payment 2024 is to help citizens cope up with increased cost of living. No matter what all benefits you are receiving, this retirement check is yours. All those people who get their Social Security benefits 2024 every month are also getting these checks.
Bottom Line. Yes, Social Security is taxed federally after the age of 70. If you get a Social Security check, it will always be part of your taxable income, regardless of your age. There is some variation at the state level, though, so make sure to check the laws for the state where you live.
Have you heard about the Social Security $16,728 yearly bonus? There's really no “bonus” that retirees can collect. The Social Security Administration (SSA) uses a specific formula based on your lifetime earnings to determine your benefit amount.
Social Security and Supplemental Security Income (SSI) benefits for more than 71 million Americans will increase 3.2 percent in 2024. Read more about the Social Security Cost-of-Living adjustment for 2024.
The Social Security five-year rule is the time period in which you can file for an expedited reinstatement after your Social Security disability benefits have been terminated completely due to work.
Generally speaking, the average Social Security check was $1,710.78 in November 2023, according to the Social Security Administration. However, this number doesn't specifically address retirees who earned a middle income during their time in the workforce.
There's really no “bonus” that retirees can collect. The Social Security Administration (SSA) uses a specific formula based on your lifetime earnings to determine your benefit amount.
The maximum Social Security benefit at full retirement age is $3,822 per month in 2024. It's $4,873 per month in 2024 if retiring at age 70 and $2,710 if retiring at age 62. A person's Social Security benefit amount depends on earnings, full retirement age and when they take benefits.
Social Security survivors benefits are paid to widows, widowers, and dependents of eligible workers. This benefit is particularly important for young families with children.
A surviving spouse, surviving divorced spouse, unmarried child, or dependent parent may be eligible for monthly survivor benefits based on the deceased worker's earnings. In addition, a one-time lump sum death payment of $255 can be made to a qualifying spouse or child if they meet certain requirements.
The number of credits you need to receive retirement benefits depends on when you were born. If you were born in 1929 or later, you need 40 credits (10 years of work). If you stop working before you have enough credits to be eligible for benefits, the credits will remain on your Social Security record.
No, you can't collect two benefits at the same time
As of June 2023, about 67 million Americans receive a social security benefit each month. Of those, 5.8 million are survivors of deceased workers, accounting for 11.5% of the payments. But don't count on receiving a double payment if your spouse passes before you.
The Social Security disability five-year rule allows people to skip a required waiting period for receiving disability benefits if they had previously received disability benefits, stopped collecting those benefits and then became unable to work again within five years.
For 2024, the changes consist of an 3.2% cost-of-living adjustment (COLA) to the monthly benefit amount, an increase in the maximum earnings subject to the Social Security tax, a rise in disability benefits, and more.
Depending on your income, up to 85% of your Social Security benefits can be subject to tax. That includes retirement and benefits from Social Security trust funds, like survivor and disability benefits, but not Supplemental Security Income (SSI).
Exception: If you will reach full retirement age in 2023 or already reached it in a prior year, select "Yes" only if you expect to earn over $4,710 in every month or perform substantial services in self-employment in every month of 2023. (In 2023, the monthly earnings limit is $4,710.)
Introduction: My name is Margart Wisoky, I am a gorgeous, shiny, successful, beautiful, adventurous, excited, pleasant person who loves writing and wants to share my knowledge and understanding with you.
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