As 2024 has gotten underway, some important Social Security changes have gone into effect, which many may have overlooked. The way Social Security operates this year has shifted in significant ways, and it’s crucial for the public to be aware of these changes and how they might impact them.
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1. Adjusted Full Retirement Age
You may not be aware, but the full retirement age, or FRA, has been recalibrated. If you turned 66 before 2024, your FRA was between the ages of 65 and 66 and six months. However, if you turn 66 in 2024, your FRA is now 66 and eight months. For those reaching this age in 2026, the FRA is set at 67. This shift implies that future retirees will have to wait longer to receive their full monthly payments.
2. Shifted Earning Limits
Another notable change revolves around earning limits for current retirees working while collecting Social Security benefits. If you won’t reach FRA during the entire year, you can earn up to $22,320 in 2024 without any reduction in benefits. Beyond this threshold, your Social Security income decreases. However, these limits have been increased from $21,240 and $56,520 in 2023, allowing individuals to earn more without losing part or all of their Social Security payments.
3. Higher Taxes for High Earners
High earners will also face another significant alteration in 2024, with the maximum wage subject to Social Security tax increasing from $160,200 to $168,600. This means those with incomes surpassing $160,200 will be paying more in Social Security tax. Nevertheless, their future benefits will also be higher.
It’s important to pay attention to these changes as they could impact when you claim benefits, how much you can work, and what taxes you will have to pay. Ignoring these shifts in Social Security may lead to unexpected financial repercussions down the line.
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