As we usher in the new year, 2024 brings with it several changes to Social Security and Medicare that will impact millions of Americans. These adjustments aim to ensure the sustainability of these crucial programs and address the evolving needs of an aging population. In this article, we will explore the key modifications and their implications for beneficiaries.
Social Security Changes:
Cost of Living Adjustment (COLA):
One of the most anticipated changes every year is the Cost of Living Adjustment, or COLA. In 2024, Social Security beneficiaries can expect a modest increase of 3.2% in their benefits to counteract the rising cost of living. This adjustment is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). For retirees, this will be a lower increase from the record breaking COLA set in 2023 due to the inflation issues that began in 2022.
For those who choose to work while receiving Social Security benefits, there's a cap on how much income they can earn before facing a reduction in their benefits. In 2024, the earnings limit for workers younger than their retirement age increases to $22,320. For every $2 earned over this limit, Social Security benefits for the year will decrease by $1. The earnings limit for workers reaching full retirement age in 2024 will increase to $59,520. For every $3 earned over this limit, Social Security benefits for the year will decrease by $1.
Premiums and Deductibles:
Medicare is a cornerstone of healthcare for seniors, and changes to its structure can have a significant impact. In 2023, Medicare Part B premiums decreased. Unfortunately, 2024 brings increased Medicare Part B premiums and deductibles. Understanding these changes is crucial for beneficiaries to budget for their healthcare expenses effectively.
The deductible for Medicare recipients will increase $14 to $240 in 2024. For higher-income Medicare beneficiaries, the Income-Related Monthly Adjustment Amount (IRMAA) may apply to your premiums. This means that those with higher incomes will pay higher premiums for Medicare Part B and Part D coverage. Medicare premiums are based on your Modified Adjusted Gross Income (MAGI) from tax returns 2 years ago, meaning that your 2024 premiums are based on your 2022 income tax return.
2024 Medicare Part B Premiums
2022 MAGI (Single)
2022 MAGI (Married Filing Joint)
2024 Part B Premiums (Per Person)
Less than $103,001
Less than $206,001
Greater than $103,000 but less than $129,001
Greater than $206,000 but less than $258,001
Greater than $129,000 but less than $161,001
Greater than $258,000 but less than $322,001
Greater than $161,000 but less than $193,001
Greater than $322,000 but less than $386,001
Greater than $193,000 but less than $500,001
Greater than $386,000 but less than $750,001
Greater than $500,000
Greater than $750,000
As we enter 2024, staying informed about Social Security and Medicare changes is paramount for those who rely on these programs for financial security and healthcare coverage. The adjustments in COLA, earnings limits, premiums, and deductibles reflect the ongoing effort to adapt to the evolving needs of an aging population while maintaining the long-term sustainability of these vital safety nets. To navigate these changes successfully and ensure a secure and healthy future, schedule a meeting today.
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