What All Retirees Need to Know About Social Security in 2024
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Over 50 million retired workers in the U.S. receive Social Security benefits, which are important in helping many of them make ends meet each month.
In some ways, Social Security is the same as when it began paying monthly benefits in 1940. But some things change with the federal program each year. Here are five key things all retirees need to know in 2024.
Image source: Getty Images.
1. Some of your Social Security benefits could be taxable
Up to 85% of your Social Security retirement benefits could be subject to federal taxes this year. Whether or not you have to pay federal taxes on your benefits and, if so, how much depends on your combined income. This amount is calculated by adding up your adjusted gross income (AGI), nontaxable interest, and half of your Social Security benefits from the year.
The following table shows how much you might have to pay in federal taxes in 2024 on your retirement benefits:
| Tax Filing Type | Combined Income | Federal Tax Rate |
|---|---|---|
| Individual | Under $25,000 | 0% |
| $25,000 to $34,000 | Up to 50% | |
| Over $34,000 | Up to 85% | |
| Married filing jointly | Under $32,000 | 0% |
| $32,000 to $44,000 | Up to 50% | |
| Over $44,000 | Up to 85% | |
| Married filing separately | Any | Up to 85% |
Data source: Social Security Administration. Table by author.
Most U.S. states don’t tax Social Security benefits. But if you live in Colorado, Connecticut, Kansas, Minnesota, Montana, New Mexico, Rhode Island, Utah, Vermont, or West Virginia, some of your retirement benefits could be taxed depending on how much you make.
2. New earnings-test limits
If you receive Social Security retirement benefits before you reach your full retirement age (FRA) and continue to work, your benefits could be reduced. Below are the new earnings-test limits for 2024:
| Age | Earnings Limit | Amount Withheld |
|---|---|---|
| Under full retirement age |
$22,320 per year ($1,860 per month) |
$1 withheld for every $2 in earnings above the limit |
| Year you reach your FRA |
$59,520 per year ($4,960 per month) |
$1 withheld for every $3 in earnings above the limit |
Data source: Social Security Administration. Table by author.
Note that once you reach your FRA, none of your Social Security retirement benefits will be withheld regardless of how much you earn. Also, the money withheld previously will be paid to you.
3. The cost-of-living adjustment (COLA) announcement in October
Whatever your monthly benefit is, it will remain the same throughout 2024. However, the Social Security Administration will announce the 2025 cost-of-living adjustment (COLA) in mid-October this year. The COLA is calculated by determining the increase (if any) in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for the third quarter of 2024 from the year-ago period.
4. The real scoop about Social Security’s future
Since 2024 is a big election year in the U.S., you could hear politicians mention Social Security quite a bit. There are three things to know about the program’s future:
- It isn’t going broke or bankrupt.
- But its combined trust funds will run out of money by 2033 if nothing is done, based on the latest analysis by the Congressional Budget Office.
- Once the trust funds are depleted, benefits will be reduced by around 25% — again, only if no changes are made before then to bolster the program’s finances.
5. How to find out more information
There is a lot more that retirees need to know about Social Security in 2024 than can be addressed in one article. To get more information about the program, check out the Social Security Administration website.
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