Social Security is changing all the time, though many don't realize it. Average benefits climb month after month, and a new year brings new rules that affect workers and seniors alike. We're just a few short weeks away from 2024, when five major changes will go into effect. Here's what you need to know about them.

1. You have to work a bit more to earn Social Security credits

You must earn at least 40 work credits in order to claim Social Security retirement benefits. A credit is defined as $1,640 in earnings in 2023, and you can earn a maximum of four credits per year. But in 2024, the definition of a credit will climb to $1,730.

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Image source: Getty Images.

This shouldn't be a big concern, as even many part-time workers earn the $6,920 they'd need to claim their four work credits for 2024. And if you've already earned at least 40 work credits in previous years, you don't have to worry about this at all.

2. High-income workers will have to pay more Social Security taxes

Most workers pay Social Security payroll taxes on all of their income each year, but this isn't always the case for high earners. In 2023, only the first $160,200 you earn is subject to Social Security taxes. You don't pay these taxes on anything over this amount, but additional earnings also won't boost your future Social Security checks.

In 2024, the first $168,600 a person makes will be subject to Social Security taxes. So some high earners may have to get used to paying more in taxes than they have in previous years. This money will come directly out of your paychecks if you're employed by someone else.

3. Beneficiaries' checks will get a boost

The Social Security cost-of-living adjustment (COLA) for 2024 is 3.2%. This will boost the average worker's monthly benefit from $1,848 per month to $1,907 per month -- a $59 increase. Disabled workers and those receiving spousal benefits will also see their checks rise accordingly.

The chart below gives a brief overview of how the COLA will affect the checks of various types of beneficiaries.

 

Average Monthly Benefit Before COLA

Average Monthly Benefit After COLA

All Retired Workers

$1,848

$1,907

Aged Couple, Both Receiving Benefits

$2,939

$3,033

Widowed Mother and Two Children

$3,540

$3,653

Aged Widow(er) Alone

$1,718

$1,773

Disabled Worker, Spouse, and One or More Children

$2,636

$2,720

All Disabled Workers

$1,489

$1,537

Source: Social Security Administration.

But keep in mind that everyone's benefit is different. Those receiving above-average checks today will see larger increases in 2024, and those receiving smaller checks will also receive smaller benefit increases next year.

4. You can earn more before running into the earnings test

The Social Security earnings test withholds benefits from seniors who are working while claiming under their full retirement age (FRA). This is somewhere between 66 and 67, depending on your birth year.

In 2023, you lose $1 from your checks for every $2 you earn over $21,240 if you're under your FRA all year. If you'll reach your FRA this year, you lose $1 for every $3 you earn over $56,520, should you earn this much before your birthday. In 2024, these thresholds will rise to $22,320 and $59,520, respectively.

Oh, and in case you're worried, the Social Security Administration doesn't keep the money it withholds from you forever. When you reach your FRA, it recalculates your benefit and increases it accordingly, depending on how much it previously withheld from you.

5. The maximum Social Security benefit is climbing

The highest-earning Social Security beneficiaries receive $4,555 per month in 2023. But in 2024, a whopping $4,873 will be up for grabs. That comes out to $58,476 per year.

Most people won't qualify for this, though. In order to claim this much, you must earn the maximum income subject to Social Security tax in at least 35 years and then wait until age 70 to sign up for benefits. That's just not realistic for most people.

The above changes may not all apply to you right now, but they're worth keeping in the back of your mind anyway. Similar changes happen every year, and they could affect you in the future. Being aware of them and adjusting your financial plan accordingly is key to avoiding unwanted surprises.