According to a press release that the SSA will grant in October, there will be significant alterations to the Social Security scheme in 2024. Because various facets of the scheme are modified annually to account for variations in earnings and inflation, a comparable notice is made approximately at the same moment every year.
Increase In Prices
The average price of milk climbed by 17% over the last ten years, while the average price of bread increased by 35%. The calculations needed to determine the cost-of-living increase for 2024 are not yet available because annual COLAs are predicated on inflation statistics from the third quarter of the year, which spans from July through September. In July 2023, the average retired employee benefit was $1,838.58 a month. A 3% COLA would increase the sum to $1,893.74 as of January 2024, increasing benefits for retired workers by $55.16 per every month or $661.92 annually.
Income Due To Social Security Payroll Taxes
The income due to Social Security payroll taxes represents the biggest knowledge gap found by the Nationwide survey. The income due to taxes on Social Security is capped under existing law. Still, many lawmakers want to modify that because employees who earn more are subject to a lower rate of taxation. The maximum amount of taxable income is currently $160,200. However,, because the income cap is based on the national average hourly salary index, it usually goes up yearly.
The exact maximum taxable earnings limitation for 2024 will be disclosed in the SSA’s press release in October, but the Board of Trustees anticipates it will be $167,700. In such case, some employees would have additional Social Security taxes on $7,500 in wages the following year. Most employees pay 6.2% in taxes, translating to an extra $465 in taxation for employees whose salary is higher than the threshold.
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