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COLA of 3.2% not the only change coming for 2024
Social Security benefits will increase by 3.2% effective with the January payment as announced on October 12th. By law, the 2024 COLA is based on the increase in the Consumer Price Index for Urban Wage Earners (CPI-W) between the 3rd quarter of 2022 and 3rd quarter of 2023—meaning it looks backwards at inflation. Janet Novack of FORBES explains that other changes will also occur. The maximum amount of earnings subject to Social Security tax (also called the wage base) will rise from $160,200 to $168,600, up 5.2%. That adjustment, which equates to higher taxes for 6% of workers, is based on changes in the national average wage index, not the CPI. The maximum benefit for a high-income single worker claiming Social Security at “full” retirement age will be $3,822 a month in 2024, up from a maximum of $3,627 in 2023. In 2024, those receiving Social Security early will lose $1 in benefits for every $2 in earnings above $22,320, or $1,860 a month, up from $21,240 a year in 2023. Lastly, Medicare premium rates have not yet been set, though a small increase is expected, thus reducing the net COLA increase. Full piece here.