It's totally normal to be anxious about Social Security and how far checks will go in the future, especially if it's your primary source of retirement income. It's no secret that the program is facing solvency issues. But there's no need to worry about that just yet. 

For the next few years at least, all seniors will continue to receive the benefits they've earned based on their work histories. But that doesn't mean there won't be changes to Social Security. Below, we'll look at three of the top changes coming to the program next year.

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1. Cost-of-living adjustment (COLA)

All Social Security beneficiaries will receive a 3.2% cost-of-living adjustment (COLA) for 2024. This will raise the average monthly benefit from $1,841 to $1,900 per month. But you might receive more or less than this. Since COLAs are percentages, your checks will increase by a larger amount if your benefit is higher than the $1,841 average, or a smaller amount if your checks are lower than this. The Social Security Administration (SSA) will mail you a COLA notice in December with details on your specific benefit increase for 2024.

This COLA isn't nearly as high as the 8.7% increase that seniors saw last year, but that's because inflation has slowed. The SSA calculates COLAs by looking at how much the average cost of a bundle of goods and services has increased from the third quarter of the previous year to the third quarter of the current year, as outlined by the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). 

When inflation is high, the difference in CPI-W data from one year to the next is larger, and that leads to a bigger COLA. But when inflation is down, COLAs are also lower. However, even a small boost is better than nothing.

2. Higher exempt amounts under the earnings test

You may not realize it, but the SSA actually withholds benefits from some seniors who are working and claiming at the same time. If you're under your full retirement age (FRA) for all of 2023, you lose $1 from your checks for every $2 you earn over $21,240. If you reach your FRA in 2023, you only lose $1 for every $3 you earn over $56,520 if you hit this amount before your birthday.

The SSA ultimately gives back any funds it withholds from you due to this earnings test when you reach your FRA. At this point, it recalculates your monthly benefit amount and increases it slightly to account for the money it kept from you in past years. But this might still be frustrating to some seniors.

Fortunately, in 2024, the exempt amounts for the earnings test are increasing. You'll be able to earn up to $22,320 in 2024 before you start losing $1 for every $2 you earn over this amount, assuming you're under your FRA all year. And if you reach your FRA in 2024, you only lose $1 for every $3 once you earn more than $59,520. This change won't affect all seniors, but it could help those who remain in the workforce boost their monthly income a little.

3. Higher maximum Social Security benefit

The maximum Social Security benefit in 2023 was a whopping $4,555 per month, which translates to $54,660 annually. That's already pretty impressive, but things are going to get even sweeter for the wealthiest beneficiaries next year when the maximum benefit rises to $4,873 per month. However, it's important to realize that most people won't earn nearly this much.

To earn the maximum Social Security benefit, you have to do three things:

  1. You must work at least 35 years so you have no zero-income years included in your benefit calculation.
  2. You must have earned the maximum income subject to Social Security taxes ($160,200 in 2023) in all 35 of your highest-earning years.
  3. You must delay Social Security benefits until you turn 70 and qualify for your largest possible checks.

For most people, that's just not doable. That's why the average Social Security check is only $1,841 per month right now. But as discussed above, this will also rise in 2024 due to the COLA.

The three changes discussed above are common Social Security adjustments that typically happen every year. Rarely, there won't be a COLA for the next year, but this has only happened three times since 1975. For the most part, seniors can expect these changes to occur annually, and it pays to familiarize yourself with them so you understand how they might affect your future checks.