hey there everyone today I want to cover the highlights of the recent changes announced for the Social Security program beginning in 20124 now some of this I've already covered in more depth so I'll mostly keep this video to the headlines and likely dive in deeper on certain pieces later on now first up we're going to talk about the cost of living adjustment and how that will affect the average social security benefit then we'll move on to the average wage index and all the changes that come from that so things like the amount required for one credit the windfall elimination provision the Social Security formula the maximum taxable wage base the earnings limit now it may sound strange here that I would encourage you to skip this video but look if you want to see all of this you can simply download my Social Security cheat sheet which has just been updated for 2024 this is just two pages with all the things you need to know about social security I'm going to put a link down in the description where you can get yours if you want to get that so let's geted started first with a cost of living adjustment for 2024 benefits will increase by 3.2% this is going to drive up the average social security benefit by varying amounts depending on the type of benefit it is the average benefit across all retired workers is increasing from $1,827 to $197 for a couple who are both collecting benefits this is increasing from $2,939 to $3,033 and the average survivors benefit is increasing from $1,718 to $1,773 and last the average disability payment is increasing from $1,489 to $1,537 and then next up we have the average wage Index this changes a lot it controls just about all the annual changes to Social Security and it's important important to note that there's always a 2-year lag in the average wage index so the number that was just released was the wage index for 2022 that's increasing from 6,575 7 to 63,0 79513 so a change of 5.32% now it's the 2022 wage index that sets the earnings limit maximum taxable wage base the annual Social Security formula the indexing factor for past wages and a lot more but that 2022 wage index sets it for 2024 so let's dive into some of those first let's cover the Social Security formula this is often referred to as the bpoint formula and it's used to calculate your final benefit amount and if you want to see more details on how this formula is used you may want to check out my video how Social Security retirement benefits are calculated in three easy steps and as I was getting the link for that to put down in the description I realize that I need to redo that video it not that it has incorrect information it's just a little dated at this point but essentially there are two separate points in this calculation that typically change every year the first bino is increasing from $1,115 to $1,174 and the second bino is increasing from $ 6,721 to $7,000 $78 now the current year formula is only used to calculate the benefits of those who turn 62 in that year so if that's you this is the formula that's going to be used and then up next we have the windfall elimination provision reduction amount this is a provision that impacts those who have a pension from a job where they didn't pay social security taxes and since this reduction amount is generally 50% of the first Bend point that we just talked about we know that that's going to be increasing from $558 to $587 and then we have the maximum taxable wage base this is the maximum amount of wages that are subject to Social Security taxes in 2024 the wage base will be $168,600 any earnings you have over that threshold are not subject to the Social Security portion of the FICA tax and the last big change is the earnings limit for retirement benefits this is the amount of earnings you're allowed to have while you are collecting Social Security if you are under for retirement age so if you make more than $ 22,32 in 2024 Social Security Administration will withhold $1 in benefits for every $2 over that amount that you earn and then there is the exception for that year that you attain for retirement age the calendar year not the 12-month period during that period the earnings limit that will apply nearly triples from the first amount all the way up to $59,500 and then the withholding amount on dollars earned over that limit is not as steep either for every $3 over the limit the administration withholds $1 and benefits and again very important at full retirement age and Beyond there is no earnings limit now this is a topic that I've already covered for 2024 where I cover not only the earnings limit but I answer a lot of the questions that I'm asked all the time about this and that along with all the other resources I've mentioned is going to be down in the description so those are the big items but as always there's going to be things that pop up during the year and when they do I'll be right here telling you about them so if you haven't already be sure to subscribe and hit notifications bell too and again if you want a written version of all the stuff that we've just covered and then some you can download my Social Security cheat sheet again it's going to be down in the description thanks so much for watching