In this article, you’ll learn about the new bill that increases Social Security checks in the US: how it works, and the latest news and updates. Social Security checks are federal financial assistance benefits provided to low-income individuals, disabled persons, and retirees as support for the rising cost of living. Each year, the federal government adjusts these benefits to address inflation and living costs. This year, the SSA has introduced new bills to further enhance these benefits. To find out more about the new bill, how it affects Social Security checks, and other related details, continue reading this article.
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New Bill Increasing Social Security Checks in the US
With the latest Cost of Living Adjustment (COLA), Social Security benefits will be increased by 3.2%, effective January 2024. This adjustment applies to federal Social Security benefits, including SSI, SSDI, and others, and will be implemented throughout 2024. The Federal Social Security Act governs each COLA, which is determined based on changes in the Consumer Price Index (CPI).
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The COLA for the current year reflects an average increase based on the third-quarter CPI of the previous year. Social Security checks in the U.S. are rounded to the nearest tenth of a percent. This adjustment aligns with laws requiring that the average CPI-W, which measures inflation and related tax adjustments, be used to determine the increase.
How does it work?
A new bill increasing Social Security checks in the US aims to address the rising cost of living and inflation. The Cost-of-Living Adjustment (COLA) helps adjust beneficiaries’ monthly benefits to better reflect current economic conditions. Social Security programs for old age and disability provide monthly payments to over 70 million Americans, including children and seniors.
These benefits are crucial for many Americans who are at risk of falling into poverty. The 2024 COLA adjustment not only raises monthly benefits but also impacts tax rates. There are common misconceptions among recipients, but Social Security benefits have increased by 3.2%, with the average monthly benefit rising to $1,907. Retirees receiving Social Security will see their monthly checks reach up to $4,873 in 2024.
Latest News & Updates
Under the new bill increasing Social Security checks in the US, beneficiaries will face a higher tax bill in 2024 due to adjustments in the Social Security System. All beneficiaries must pay federal income taxes according to their income threshold, and as their benefits generally rise with the cost of living adjustment, more seniors are becoming subject to taxation each year.
For individual taxpayers with incomes between $25,000 and $34,000, up to 50% of their benefits may be taxable. Those earning over $34,000 could face taxation on up to 85% of their benefits. For joint filers with incomes between $32,000 and $44,000, taxes may be up to 50%. Although fewer than 10% of Social Security beneficiaries pay taxes on their benefits, this number has been increasing by 40%, according to the Social Security Administration.
Some workers will experience higher taxes on their Social Security benefits due to adjustments by the Internal Revenue Service. The IRS adjusts the maximum earnings threshold for Social Security in line with inflation. The Cost of Living Adjustment (COLA) helps preserve the purchasing power of Social Security benefits, which can be eroded by inflation. The base percentage for COLA is based on the consumer price index (CPI) for urban wage earners, as determined by the Bureau of Labor Statistics.
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These changes, driven by rising living costs and inflation, are updated annually by the Social Security Administration based on the CPI for the third quarter of the year. This ensures that Social Security beneficiaries receive adjusted benefits and are taxed accordingly.
