Millions of retired Americans rely very heavily on Social Security to cover their living expenses. Of course, retiring on Social Security alone isn't ideal. But many people do it anyway. And if you think you might end up in the same boat, then it's important to stay aware of Social Security changes -- even if they won't impact you immediately.
Meanwhile, here are three changes you should be aware of.
1. It's getting harder to qualify for benefits
If you hold down a full-time job for many decades, you generally do not have to worry about qualifying for Social Security in retirement (provided you're reporting and paying taxes on all of your income). But part-time workers need to be aware that it's getting harder to earn Social Security credits.
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See, to get benefits in retirement, you must accrue 40 work credits in your lifetime, at a maximum of four credits per year. Meanwhile, the value of a work credit changes from year to year.
Last year, it took $1,510 in earnings to snag a single credit, but this year, it takes $1,640. And that figure is likely to keep rising, so you'll need to keep tabs on it if you work part time but want to qualify for Social Security down the line.
2. The program's trust fund depletion date just got moved up
Social Security is facing a revenue shortfall in the coming years as baby boomers exit the workforce in droves. The program can thankfully tap its trust funds for the time being to keep up with scheduled benefits and avoid cuts. But once those trust funds run dry, benefit cuts will be on the table.
Meanwhile, the Social Security Trustees recently released their 2023 report, and it stated that the program's trust funds are likely to be out of money by 2034. This is a change from last year's report, which called for a trust fund depletion date of 2035. This means Social Security recipients may be a year closer to seeing their benefits reduced if lawmakers don't find a way to fix the program's finances.
3. It's looking like next year's raise won't be as large as 2023's
In 2023, seniors on Social Security got to enjoy an 8.7% cost-of-living adjustment, or COLA. That raise came about due to soaring inflation in 2022.
But inflation has cooled quite a bit this year. And to be clear, that's an excellent thing. The only downside is that it's unlikely that 2024's Social Security COLA will be anywhere close to the raise seniors received at the start of 2023. It's even possible that seniors won't be eligible for a COLA at all next year.
Stay in the know
Although Social Security has been around for a really long time, the program is subject to changes -- some of which may be positive and others less so. It's important to keep tabs on Social Security changes, whether you're already collecting a monthly benefit or are decades away from retiring. You never know which updates to the program might end up impacting you.
