of Social Security Administration (SSA) has announced several major changes that could affect monthly benefits for millions of American beneficiaries. If you are a retired worker or a disabled person living in the United States, keep an eye out for upcoming changes. Check out all the new benefit changes and how they affect your household finances.
Social Security is the nation’s largest retirement system, covering nearly 96% of working Americans’ incomes. it is, financial security Support retirees throughout their golden years by paying expenses for the deceased employee’s family members, including their spouse, children, and parents.
The main changes are: social security are set to take effect this year, but perhaps the most important are those affecting COLAs, income limits, and work credit programs. The most important measures regarding these issues are listed below.
- Social Security benefits increase in 2024: Beneficiaries will receive a 3.2% increase in their monthly check due to a cost of living adjustment (COLA). This increase is intended to protect purchasing power during times of inflation.
- Social Security limits will increase: If seniors wish to receive these benefits before Full Retirement Age (FRA), they should be aware of the limitations of the means test. If you work past your Full Retirement Age (FRA), you can earn up to $59,520. Until then, $1 for every $3 you earn at work will be deducted from your Social Security benefits.
- Social Security credits are even more difficult to obtain. To be eligible for the retirement program, an individual must earn at least 40 credits during active duty, with 4 credits earned each year. However, the value of individual credits can change over time. Full-time workers can earn her 4 credits, but part-time workers should be careful as they are not guaranteed to earn credits.
- Cost of Living Adjustment (COLA) projections for 2025: According to the latest Senior Citizens Alliance (TSCL) analysis, COLA is expected to be between 2.6% and 3%, which would be 1.25% or 0.2% lower than this year.
Cuts in Social Security benefits could hurt millions of elderly and disabled people
In addition to the above tweaks, there are also other ideas to reduce the load. social security benefits That is being studied. Cuts to Social Security would be harmful to millions of beneficiaries who rely on Social Security payments as their primary source of income. Most benefit reduction plans will affect low- and middle-income earners and threaten their financial security because most retirees, with the exception of a few high-income earners, have low incomes.
About 25% of elderly households earn less than $20,000 a year, half make less than $50,000, and nearly three-quarters make less than $100,000. [5] Very few if any. low income elderly Have pension income. As a result, some lawmakers have proposed significant cuts to Social Security benefits in recent years. For example, a much-debated House Republican Study Committee proposal would raise the full Social Security retirement age to 69 or 70, thereby reducing payments by 20%. Raising the retirement age would result in reduced benefits for all new retirees, including those in the lower and middle ranks. Because of their high dependence on Social Security benefits, class beneficiaries are the hardest hit.
Although it is increasing, Average life Although sometimes used to justify raising the retirement age, lower-income beneficiaries often do not benefit from these increases as much as higher-income people. It will take years for cuts to Social Security benefits to yield significant savings, but by exempting current retirees and those nearing retirement and phasing in the changes, lawmakers hope workers will have more time to prepare. will be able to give you. According to many supporters, raising the retirement age would primarily benefit workers under 30. Although the Social Security shortfall is only a decade away, these measures will not lead to decades of savings.
