The 4 Big Changes to Social Security in 2024

(don’t forget to checkout the video of this blog too)

Every year social security makes adjustments to the benefits that people are receiving in retirement.

This year is no different.

The benefits are adjusted to “attempt” to keep up with inflation and the penalties are recalculated as well (yes, there are penalties surrounding social security and collecting it too early, or making too much money while collecting).

Here are 4 big changes that occurred to social security this year, in 2024 (and make sure you grab a copy of my free social security cheat sheet updated for 2024):

✅ The cost of living adjustment, also known as the inflation protection increased by 3.2% this year

The average FRA benefit went from $2,939/month to $3,033/month with this increase.

This increase is not nearly enough to fully combat the effects of inflation on your retirement portfolio but at least it’s something.

✅ The average wage index increased by 5.32% this year

This index has a 2-year lag, so it’s using data from 2022 for 2024, but it tracks the average salary for retirees through age 60.

This is what sets the social security earnings limit that allows you to earn income without having social security penalized.

✅ The new earnings limit is set to $22,320 per year

This is the amount of earned income you can make without having social security penalized at 50% for every dollar earned above that.

The earnings limit increases to $59,520 in the year you reach full retirement age (with a 33% penalty for income earned above that).

The penalty goes away entirely when you reach full retirement age for social security.

This is a big reason it pays to delay social security if you can.

✅ The Max Windfall Elimination Provision (WEP) Penalty Increased

The max WEP penalty went up from $558 to $587 this year

This simply increases the penalty for retirees with pensions who weren’t obligated to contribute to social security during their working years

This penalty will be assessed to the social security benefits that retirees are able to collect in retirement.

Remember, social security is one of the primary sources of guaranteed income for retirees so it’s important to know the rules.

Make sure you are maximizing your social security benefits as part of your retirement plan (especially since you have been paying into this program for decades)!

Let’s chat 💬😎