Social Security wage base, COLA set for 2024

Seniors got some welcome news this week, when the Social Security Administration (SSA) announced a cost-of-living adjustment (COLA) of 3.2% for both Social Security and Supplemental Security Income (SSI) benefits beginning in January 2024. COLA, which is based on the consumer price index, rose 8.7% a year ago.

In 2024, retirees receiving Social Security benefits will be able to earn $59,520 in the year they reach full retirement age before their benefits are reduced by $1 for every $3 in earnings over the limit. That figure is an increase of $3,000 from 2023.  Beneficiaries younger than full retirement age can earn up to $22,320 in 2024 before their benefits are reduced by $1 for every $2 in excess earnings, up from $21,240 in 2023.

The maximum Social Security benefit for a worker retiring at full retirement age will increase to $3,822 per month in 2024 from $3,627 in 2023.

The SSA also announced individual taxable earnings of up to $168,600 annually will be subject to Social Security tax in 2024, an increase from $160,200 in 2023.  This is the wage base limit that applies to earnings subject to the 6.2% OASDI tax (old age, survivors, and disability insurance). At or above the wage base limit, the employee and the employer each will pay $10,453 in tax, an increase of $521 for each party in 2024.