You Must Make This Important Update To Keep Receiving Social Security — Here’s What To Know

For many people, Social Security is a financial necessity once they reach retirement age. It’s not a simple system, though. Changes over time will impact what you save, how much you have available, and how much you’ll pay for protection.

For 2024, there are several Social Security changes you need to know about to prepare yourself (and to maximize your retirement goals ). Here’s where to start.

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1. Social Security benefits are growing by 3.2%

Thanks to the cost-of-living adjustment, Social Security benefits will grow by 3.2% for most recipients in 2024. This increase aims to reduce the impact inflation has on retirees.

The increase in 2024 is far smaller than that of 2023 (8.7%), but it’s still an increase in your check. For the average retired worker, that’s an increase of $59 per check.

2. Medicare premium offset is in place

Many people on Social Security will see premiums for Part B increase, which can hurt the cost-of-living adjustment you just received. The Medicare premium offset is back for 2024 after being applied to 2023 to help reduce the large adjustment to the cost of living.

For most people, the standard monthly Part B premium will rise to $174.70. That’s nearly a $10 increase from the previous year.

3. Maximum taxable earnings are higher

Another change for Social Security in 2024 is an increase in the maximum taxable earnings, often called the contribution and benefit base. For 2024, that base is $168,600.

This is the amount of your income subject to the Social Security tax. You pay these taxes during your working lifetime, and ultimately, the funds support the Social Security Administration’s retirement benefits.

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4. The max monthly payout is on the rise for full retirement age

Those who wait until full retirement age before cashing in and who earned a higher wage through most of their working years are likely to see a boost.

The maximum monthly Social Security check for those who wait until they reach their full retirement age is now $3,822. That’s $195 higher than the previous year. Those who wait even longer to age 70 will see that benefit climb to $4,873.

5. Disability earning limits have increased

A person with a permanent disability, meaning they can’t work, and who qualify for Social Security disability income will see their income threshold rise. Those who qualify can earn no more than a set monthly amount before their benefits are reduced.

For 2024, that figure for non-blind individuals is $1,550 per month. That’s up from $1,470 the year before. For those who are blind, earning as much as $2,590 per month is allowable.

6. The earnings test threshold is higher

Some people collect Social Security but are still working. If that occurs, a portion of their benefit is temporarily withheld. This is often referred to as the earnings test.

It applies when you're working, collecting Social Security, and you’re not yet at full retirement age.

The threshold for 2024 is $22,320, a jump from the previous year. Those who earn more than this will have $1 withheld for every $2 in work they complete. For those who will reach full retirement age this year, the limit in the months prior is $59,520.

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7. Earning lifetime work credits is harder

To earn Social Security benefits during retirement, a person must earn at least 40 lifetime work credits prior. You can only earn four credits each year.

To receive one credit, you needed to earn at least $1,640 in earned income in 2023, but that figure jumps in 2024. Now, it’s necessary to earn $1,730 to qualify for a credit.

That means you’ll need to earn at least $6,920 in 2024 to gain the maximum of four work credits.

8. Nebraska and Missouri recipients no longer have to pay state taxes

All people receiving Social Security must pay federal taxes on those funds each year. Numerous states also tax these funds as income.

In 2024, two states — Nebraska and Missouri — updated their rules to eliminate Social Security taxation. If you're a resident previously taxed in those states, you can maximize your retirement savings . Ten states continue to tax Social Security benefits.

Bottom line

Social Security rules, earnings, and taxes change each year, much like any other type of change due to inflation or new taxation.

Planning for these changes can be critical for those receiving Social Security benefits because they're retired or have a qualified disability.

If you’re working and contributing to Social Security, it’s also a good time to start thinking about ways to supplement your Social Security when you reach retirement age. Making some extra money can go a long way in your senior years.

Money tips that can work for everyone

No matter what your bank account balance is, there's always an opportunity to optimize and improve your finances. Here's a quick checklist of things you can look at today.

Focus on paying off your debt . Debt can hold you back from making progress with your overall financial well-being. Aside from cutting expenses, there are tools that can help you pay off debt faster like balance transfer credit cards and debt counseling.

Earning extra income can give you breathing room. If finances are tight, earning some extra money to supplement your income can make a huge difference. A new job is one option to consider, but if you're not ready to make a big change or already retired, a part-time side job could be a better choice.

Cut your expenses. It sounds painful and so not fun, but it doesn't have to be. Take a look at your biggest expenses because that's where you'll probably find the biggest savings. For example, auto insurance rates have been soaring so shopping around for a new insurance company can be the fastest way to cut your bill. Also, look for ways to cut your grocery bill (despite rising inflation).