In this article, you will learn about the new bill increasing 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 to help with the cost of living. Each year, the Federal Government makes adjustments to these benefits to address rising inflation and living costs. This year, the SSA has introduced new legislation aimed at increasing Social Security checks. To find out more about these changes, how they work, and other relevant information, 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 increase by 3.2%, effective from January 2024. This adjustment applies to federal benefits such as SSI, SSDI, and others. The Federal Social Security Act governs each COLA, which is based on increases in the Consumer Price Index (CPI).
The 3.2% COLA for 2024 reflects the average percentage increase in the CPI-W for the third quarter of the previous year. Social Security checks in the U.S. will be adjusted according to this rate, rounded to the nearest tenth of a percent. These adjustments are mandated by laws that consider inflation and tax-related changes based on the CPI-W.
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How does it work?
The new bill addresses the rising cost of living and inflation by adjusting Social Security benefits through the Cost-of-Living Adjustment (COLA). This adjustment impacts monthly benefit amounts for Social Security beneficiaries, including those in old-age and disability programs, who collectively number over 70 million Americans, from children to the elderly.
Due to inflation and increased living costs, Social Security benefits have been revised. The COLA for 2024 includes a 3.2% increase, raising the average monthly benefit to $1,907. For retirees, monthly checks can reach up to $4,873. These adjustments help prevent many Americans from falling into poverty and address common misconceptions about Social Security benefits.
Latest News & Updates
With the new bill increasing Social Security checks in the US, beneficiaries will face higher tax bills in 2024 due to adjustments in the Social Security system. As benefits rise with cost-of-living adjustments, more seniors will be subject to federal income taxes.
For individual taxpayers, those with incomes between $25,000 and $34,000 may have up to 50% of their Social Security benefits taxed, while those earning above $34,000 could see up to 85% of their benefits taxed. Joint filers with incomes between $32,000 and $44,000 may face up to 50% taxation on their benefits. Although fewer than 10% of Social Security beneficiaries currently pay taxes on their benefits, this proportion has increased by 40% according to the Social Security Administration.
The Internal Revenue Service (IRS) has adjusted the maximum earnings threshold for Social Security to account for inflation. The Cost-of-Living Adjustment (COLA) aims to maintain the purchasing power of Social Security benefits, which can be diminished by inflation. The COLA percentage is based on the consumer price index (CPI) for urban wage earners, as determined by the Bureau of Labor Statistics.
The new bill reflects changes driven by rising living costs and inflation. Each year, the Social Security Administration revises benefits and tax thresholds based on the CPI for the third quarter of the year, ensuring that benefits and taxes align with current economic conditions.
