Fong Law Group

Your Social Security Benefits for 2025: COLA Update

The Social Security Administration (SSA) has officially released its annual cost-of-living adjustment (COLA) figures for 2025. These newly issued numbers will have an impact on monthly Social Security benefits payouts for retirees, as well as recipients of Social Security disability benefits and survivor benefits, over the forthcoming year.

The COLA Change From 2024 to 2025

In 2024, monthly payments for Social Security benefits recipients bumped up slightly from the previous year, when the COLA was increased by 3.2 percent.

Come January 1, 2025, retirees are on track to see their Social Security benefits checks rise slightly once again, by 2.5 percent, or an average of about $50 per month. This will bring the average payout per month for retirees to $1,976.

COLA tends to shift annually based in part on the consumer price index. Its purpose, according to the SSA, has been to help ensure that the purchasing power of these federal benefits keeps up with inflation over time. Automatic annual cost-of-living adjustments first went into effect in 1975.

The COLA increase over the past 10 years has been about 2.6 percent on average.

Supplemental Security Income (SSI) Benefits

Recipients of Supplemental Security Income (SSI), a federal safety net program for roughly 7.5 million seniors and people with disabilities nationwide who have limited resources, will also benefit from the latest cost-of-living adjustment, starting in late December. As of 2024, the maximum monthly federal SSI payout is $943 per individual. The new maximum monthly federal SSI payout will be $967 per individual.

Notifications Coming in December

If you are one of the more than 72 million Americans who receive Social Security benefits, keep an eye on your mailbox for an envelope from the SSA, which will send out notifications beginning in December. The notice will outline for you how much you can expect to receive in your monthly check starting in 2025. Note that payouts may vary for different individuals based on numerous factors, such as your age and past work earnings.

For further information on the 2025 changes to Social Security benefits, visit the SSA fact sheet. Access your COLA notice online by logging into your my Social Security account starting in December.

my Social Security Transitions to Login.gov

A free and secure online account can be used to manage Social Security benefits. Account users can also check application status, request a replacement Social Security card, and view notices online. By 2022, more than 64 million people had a my Social Security account, per the Social Security Administration (SSA) blog.

On July 12, 2024, the SSA announced a change affecting many account users. Those who created a my Social Security account before September 18, 2021, must transition to a different type of online account known as a Login.gov. With a Login.gov account, you can continue to access to the SSA’s online services.

According to the SSA’s press release, over 5 million users have already transitioned to a Login.gov account.

The Reason for the Change

The Administration pointed to several reasons for the change, including simplification, compliance with federal standards, and security. The new Login.gov sign-in experience should be easier for users to navigate and intends to modernize users’ online access across agencies.

After providing reassurance that my Social Security is safe, Social Security Commissioner Martin O’Malley emphasized that the change seeks to improve coordination across agencies.

“my Social Security is a safe and secure way for people to do business with us,” Social Security Commissioner O’Malley stated. “We’re excited to transition to Login.gov to access our online services, streamlining the process and ease of use for the public across agencies.”

How to Transition Your Account

To transition your account to Login.gov, sign in to your my Social Security account. Then, you will see a prompt to transition to Login.gov. After linking your account, you should see a confirmation screen. You should then have immediate access to your my Social Security or other services.

If you already have a Login.gov account, you do not need to take any action.

Is the Login.gov Notification a Scam?

You should always be wary of potential scams, particularly when encountering requests to update your credentials online. Fortunately, the notice prompting users to transition to Login.gov is not a scam, but a legitimate announcement from the SSA.

If you have questions about whether you are transitioning your account correctly, consider using the SSA’s resources for help.

Help With Your Account

Although the SSA attempts to make the transition easy, some may encounter difficulties or have questions. For assistance, visit Help | Login.gov, where you can access the 24/7 customer phone and chat support.

New Rental Assistance Rule May Open Benefits to More Seniors

The Social Security Administration (SSA) has published a final rule simplifying and expanding its rental subsidy program for Supplemental Security Income (SSI).

Effective September 30, 2024, the new rule is likely to allow more people to qualify for SSI. In addition, some current SSI recipients may see an increase in their monthly benefit amount as a result. The rule change is part of a broader agency effort to streamline certain aspects of the SSI program.

SSI applicants and recipients may want to talk to their elder law lawyer about the new rule if they have questions about how it affects them.

How Do You Qualify for SSI?

SSI is a federal public benefits program that provides a modest monthly benefit to qualifying recipients. It serves older adults across the United States who meet strict income and resource limits. People with disabilities who have limited income and resources also may qualify. In most states, to be eligible for SSI, an individual must have less than $2,000 to their name.

SSI Rental Assistance Explained

Income affects more than whether an individual is eligible for SSI benefits. It also has an impact on the SSI recipient’s benefit amount.

The SSA’s definition of income includes not only “earned” income from a job and “unearned” income such as gifted cash, but also what SSA calls “items received in-kind,” including shelter given to an individual or that someone else pays for.

A rental subsidy can result in a lower SSI payment for current recipients. It may also disqualify someone from receiving SSI because their income is too high.

However, SSI is now changing how it calculates the rental subsidy amount. The new rule will expand an exception that previously only applied in seven states but starting in September 2024 will apply nationwide.

How Rental Subsidy Is Calculated – The Current Rule

If an individual pays a monthly required rent charge that equals or exceeds the current market rental value (CMRV) in their area, a “business arrangement” exists under SSA rules. This means that the SSA does not see the SSI applicant or recipient as receiving rental assistance.

SSA regulations consider a person to be receiving a rental subsidy — a type of unearned income — if they are paying a monthly rent amount for a property that is less than the CMRV where they live. This commonly occurs when somebody is living with a family member who charges them less for rent than what they would pay on the open market.

For example, consider an SSI recipient who lives with their sibling, paying a monthly rental rate of $400. If the CMRV in their area is $800, the amount of rental assistance would be $400.

However, the SSA imposes a regulatory cap, called a Presumed Maximum Value (PMV), on the rental subsidy amount that can be assessed; that amount is $334.33 for 2024. The SSA also has an unearned income exclusion of $20 per month.

Using the example above, imagine a landlord accepting $400 per month instead of the CMRV of $800. The amount that the SSA would count as rental assistance would be $314.33 ($334.33 PMV minus the $20 general income exclusion amount).

Assuming a maximum monthly SSI payment of $943 in 2024, and assuming there is no other countable income, the recipient’s benefit amount would be reduced to $628.67 ($943 minus $314.44).

Exception

Following court cases that challenged the SSA’s rental subsidy rule, exceptions were provided in seven states — Texas, Connecticut, New York, Vermont, Illinois, Indiana, and Wisconsin.

In these states, a “business arrangement” still exists. However, the rental subsidy does not count as income if the monthly rental rate equals or exceeds the PMV, instead of the CMRV.

Apply this exception to the example above: An SSI recipient in Connecticut pays $400 per month instead of the CMRV of $800 per month. They would not have their rental subsidy count as income because the $400 payment is more than the $334.44 PMV for 2024.

The SSA notes that in the seven excepted states, application of the rental subsidy exception generally results in a higher SSI payment amount.

New Rule Applies SSI Rental Subsidy Exception Nationwide

The SSA announced in April 2024 that the new rule would make the state-specific rental subsidy exception national policy for SSI applicants and recipients.

According to the SSA, the policy change will increase the benefit amount for some recipients and allow more people to qualify for SSI payments. However, it will not affect how much SSA pays per month (a maximum of $943 in 2024).

Even with this exception, though, some applicants could see their monthly benefit amount reduced; others may not qualify. The actual formula that the SSA uses is complicated and includes the number of household members, as well as other sources of income.

The rental subsidy rule change is the latest SSA effort to remove barriers to accessing SSI payments. Also in the fall of 2024, the agency will no longer use food an applicant or recipient receives from friends, family, and community support networks as part of its “in-kind support and maintenance” calculations. And in April, SSA published a rule changing how it factors support from other public assistance programs, such as SNAP, when determining beneficiary payments.

More than 7 million individuals received federal SSI benefits in January 2023, with payments averaging $654 per month. During calendar year 2022, 172,000 individuals applied for SSI benefits based on age, while 1.23 million applied based on blindness or disability. Approximately 522,000 applicants received SSI benefits in 2022, a decrease of 1 percent compared to 2021.

Understanding Social Security Benefits Can Be Difficult. An Attorney Can Help.

While the new SSI rule may be advantageous for many low-income, older Americans, terms like “PMV,” “CMRV,” and “in-kind” support are not necessarily intuitive. They may add to the confusion around an already long and challenging SSI benefits process.

To make sure the value of your rental subsidy is accurately determined, and that you receive the SSI benefits you’re entitled to, get in touch with your elder law attorney.

Does Divorce Affect Social Security Spousal Benefits?

More than 50 million Americans receive Social Security retirement benefits. Most of these recipients are retirees who worked and paid Social Security taxes. But millions of dependents and survivors of retired workers, including spouses and ex-spouses, also receive a monthly benefit from Social Security.

Spouses can collect Social Security benefits based on their fellow spouse’s work records. These benefits are also available to divorced spouses who meet certain criteria, even after their ex-spouse has remarried. Divorced spouses are entitled to survivor benefits as well in some situations.

Social Security Auxiliary Benefits

Social Security provides monthly benefit payments to retired and disabled workers. It also pays dependent benefits and survivor benefits — collectively known as auxiliary benefits — to the spouses, former spouses, children, parents, and widows/widowers of retired, disabled, and deceased workers. In fact, more than 30 percent of new Social Security benefit awards in 2020 were auxiliary benefits.

Retirement benefits make up the lion’s share (78.9 percent) of Social Security payments. Retired workers collect most of these payments (75.1 percent), according to Social Security Administration (SSA) data. But the spouses of retired workers are the second most common recipient of Social Security retirement benefits.

As of March 2024, about 1.8 million spouses of retired workers — most of them women — received Social Security benefits averaging $911 per month. Divorced spouses comprise approximately 12 percent of all spousal benefit awardees.

Social Security benefits are also available to surviving spouses. The survivor’s benefit is based on the deceased spouse’s lifetime earnings.

Survivor benefits make up about 8.6 percent of all Social Security benefits, with monthly payments totaling $8.7 million and an average payment of just over $1,500 per month. Widows and widowers comprise about 65 percent of survivor beneficiaries.

In a 2021 report, the Congressional Research Service notes that spousal and survivor benefits were added to the Social Security system in 1939, when the majority of U.S. households consisted of a single earner, generally the husband.

Despite most women now working full-time — and increasingly out-earning their husbands — women are vulnerable to poverty in old age, says the report. This is attributed to demographic and economic reasons that include a longer average lifespan, lower labor force participation, and an “earnings gap” that can lead to women receiving a lower Social Security benefit than men.

Social Security Spousal Benefits

To address the benefit disparity between men and women, while accounting for women’s now much-higher labor force participation and the increase in the number of divorces, the SSA has over the years modified how it administers Social Security spousal benefits. This includes allowing same-sex spouses to receive spousal benefits in the same way as opposite-sex spouses.

Today, many individuals who qualify for spousal benefits do so based on their spouse’s work records and their own work records.

As a spouse, you can claim Social Security benefits based on your own earnings record. Or you can collect a spousal benefit up to 50 percent of your spouse’s Social Security benefit.

Those who qualify for both do not receive both in full, but they are automatically entitled to whichever benefit is higher, and they can collect on their spouse’s record even if they never worked.

You are eligible to receive Social Security spousal benefits when you turn 62 years old if your spouse is receiving retirement or disability benefits. However, if you choose to receive spousal benefits before you reach full retirement age (age 67 for anyone born in 1960 or later), your benefit amount will be permanently reduced.

These rules don’t apply to some child caregivers. If you are caring for a child younger than 16, or who has a disability and is entitled to receive benefits on your spouse’s record, you can qualify for Social Security spousal benefits at any age. Having a qualifying child in your care also means that you’ll receive your full spouse’s benefit even if you are under full retirement age.

Spouses who do not have a qualifying child in their care and begin receiving benefits before full retirement age can use this calculator to see how much their spousal benefit will be reduced.

Social Security Benefits for Divorced Spouses

As a divorced spouse, you can collect benefits on your ex-spouse’s record, even if the ex-spouse has remarried and the ex-spouse’s new spouse is collecting on the same record.

To qualify for a divorced spouse Social Security benefit, you must meet the following requirements:

• You were married for at least 10 years (although the marriage could have been briefly interrupted by divorce during this period; see below).
• You are currently unmarried.
• You are at least 62 years old.
• Your ex-spouse is eligible for retirement benefits.
• The benefit you are entitled to receive based on your own work record is less than the benefit you would receive based on your ex-spouse’s work record.

If your ex-spouse has not yet applied for retirement benefits but can qualify for them, you can receive benefits on their record, provided you have been divorced for at least two continuous years.

And if you are eligible for both a spouse’s benefit and your own retirement benefit, you may have a choice between the two benefits, depending on your age, explains the SSA.

Any Social Security benefits that you receive on an ex-spouse’s record may be reduced by you continuing to work and/or receiving a pension from a government employer that wasn’t required to withhold Social Security taxes.

Divorced Spouse Benefits and Remarriage

If you remarry, you generally can't receive benefits on your former spouse’s record unless the new marriage ends (by death, divorce, or annulment). In such cases, you can claim benefits on either spouse’s record, as long as each marriage meets eligibly requirements (it lasted at least 10 years, etc.) for divorced spouse benefits.

In limited cases, remarriage does not end benefits obtained on the record of a living former spouse. One of these exceptions applies if you remarry the same person.

A marriage to the same spouse could be interrupted by divorce and remarriage and still qualify for divorced spouse benefits if the remarriage took place no later than the calendar year immediately following the calendar year of the divorce.

According to AARP, remarriage also may not terminate your ex-spouse benefits if your new spouse is receiving survivor benefits, divorced spouse benefits, or childhood disability benefits.

Social Security Survivor Benefits for Divorced Spouses

The divorced spouse of a worker who has passed away could be eligible for Social Security payments equal to a surviving spouse benefit. To receive a survivor benefit as a divorced spouse, your marriage must have lasted 10 years or more and you must meet these other requirements:

• You are at least age 60 (or between 50 and 59 if you have a disability).
• You are not entitled to a Social Security benefit on your own work record that is equal to or higher than a benefit from your deceased ex-spouse.
• You are unmarried (unless you qualify for an exception).

The 10-year marriage requirement does not apply if you are caring for a child under age 16, or who has a disability, and the child qualifies for benefits on your former spouse’s record. The child must also be the natural or legal adopted child of your former spouse.

Survivor benefits are equivalent to the deceased worker’s full Social Security benefit amount. However, there is a maximum family amount—typically between 150 percent and 180 percent of a worker’s full retirement benefit—that survivors can collectively receive each month.

The SSA states that a benefit paid to a surviving divorced spouse will not affect the amount of benefits other surviving family members can receive, unless the ex-spouse is a divorced parent caring for the child of a deceased worker, in which case their benefits could affect the benefits of other survivors.

Divorced widow/widower payments are also subject to these SSA rules:

• If you remarry before age 50 you can't collect survivor benefits unless you divorce.
• If you remarry between ages 50 and 59 you aren’t eligible for survivor benefits.
• If you remarry after age 60 you can still receive survivor benefits based on your former spouse’s record. But if your new spouse is also collecting Social Security benefits, and you would receive a higher amount based on the new spouse’s work record, you will receive the higher amount.

Once you reach full retirement age and are eligible for both a survivor benefit and your own retirement benefit, you can choose to take survivor benefits first, letting your own benefits vest and then switching to retirement benefits later if that benefit is larger.

Surviving divorced spouses cannot apply online for survivor’s benefits. Contact the SSA at 1-800-772-1213 (TTY 1-800-325-0778) to request an in-person appointment at your local Social Security office.

You can use this screening tool to determine your eligibility for the different Social Security benefit programs. You may also benefit from consulting with your elder law attorney. They can help you choose the benefit option that works best for your situation.

Senators Propose Boosting Seniors' Social Security Benefits

Millions of seniors nationwide are among those who rely on the financial support they receive each month via their Social Security benefits checks.

However, many say that these payouts have failed to keep up with inflation and the escalating prices of basic goods and services over time. One analysis showed that retirees have in fact lost significant buying power in the past two decades, all while they tend to face steep increases in health care costs as they age. As of 2023, Social Security benefits experienced one of the biggest losses of purchasing power – 36 percent – since 2000.

A newly introduced bill seeks to remedy this.

The Cost-of-Living Adjustment (COLA)

At the end of each year, the Social Security Administration (SSA) informs Social Security recipients about how much they can expect to see in their payouts for the forthcoming year. Benefits typically undergo some level of change based on the SSA’s annual cost-of-living adjustment (COLA). In 2024, COLA rose slightly, by 3.2 percent. For the average retiree, that equates to receiving about $59 more per month compared with 2023.

The year prior to that, COLA had increased by 8.7 percent. Current predictions for 2025’s COLA are coming in at about 2 percent.

Today, COLA calculations are based on a metric known as the Consumer Price Index for Urban Wage Earners (CPI-W). This is where the recently proposed legislation focuses on making a change.

Boosting Benefits and COLAs for Seniors Act

In late March 2024, U.S. Sen. Bob Casey (D-PA) introduced the Boosting Benefits and COLAs for Seniors Act. Four Democratic senators are serving as co-sponsors: Richard Blumenthal of Connecticut, John Fetterman of Pennsylvania, Kirsten Gillibrand of New York, and Vermont’s Bernie Sanders, plus Peter Welch, an independent from Vermont.

The Act centers on changing the formula that the SSA uses to calculate Social Security benefits for older adults. It proposes using a different metric, the Consumer Price Index for the Elderly (CPI-E). Incorporating the CPI-E into the equation would, according to advocates, better reflect the specific types of costs facing subgroups like seniors.

As co-sponsor Sen. Gillibrand puts it, the bill would “factor the high cost of health care into Social Security benefits calculations.” In turn, this would mean bigger payouts for seniors and, she adds, would “help make sure recipients aren’t forced to choose between paying for their medication and buying other necessities.”

Nearly a dozen different agencies, including Arc of the United States, the Alliance for Retired Americans, and Justice in Aging, have endorsed the bill.

Getting Social Security Checks While Living Overseas

Many retirees look forward to traveling in their retirement. More and more are actually retiring overseas, in part as a way to stretch savings. But what happens to retirees' federal benefits while they are out of the country?

The short answer is that although Social Security benefits are available to retirees in other countries, Medicare is not. In this installment we look at Social Security. 

Medicare vs. Social Security Benefits When Living Abroad

Unlike with Medicare, retirees who decide to move to another country can still receive their Social Security benefits. Once a retiree has been outside the country for 30 days in a row, they are considered outside the U.S., and the rules for collecting benefits apply.

The Social Security Administration (SSA) will send checks to anyone living abroad who is eligible for benefits. However, the SSA is not allowed to send checks to several countries. Retirees who move to Cuba or North Korea cannot receive any checks while they are in either country, but they can get any withheld checks if they go to a country where paychecks can be sent.

In addition, the SSA generally does not send Social Security checks to Cambodia, Vietnam, or areas that were in the former Soviet Union (other than Armenia, Estonia, Latvia, Lithuania, and Russia). However, retirees may be able to apply for an exception. In such cases, retirees may have to agree to certain conditions, such as appearing in person at the U.S. embassy each month, to receive benefits.

Retirees who are U.S. citizens can continue receiving benefits for as long as they live outside the United States. However, citizens of other countries who receive Social Security may have some restrictions on how long they can receive benefits while outside the U.S.

The rules are quite complicated. The Social Security publication Your Payments While You Are Outside the United States explains in detail what restrictions citizens of individual countries face. The SSA also offers a payment screening tool that tells beneficiaries whether they'll be entitled to benefits if they remain outside the country for more than six months.

Retirees may have their checks directly deposited into a bank account in the United States, and direct deposit is available in some other countries as well. Using direct deposit avoids check-cashing and currency-conversion fees.

In countries with a large number of U.S. retirees, American embassies and consulates have individuals who are trained to provide Social Security services, including taking applications.

The countries are: Argentina, Australia, Austria, Belgium, Chile, Costa Rica, Croatia, Denmark, the Dominican Republic, Finland, France, Germany, Greece, Hong Kong, Ireland, Iceland, Israel, Italy, Jamaica, Korea, Japan, Mexico, the Netherlands, New Zealand, Norway, the Philippines, Poland, Portugal, Slovenia, Spain, Sweden, Switzerland, the United Kingdom, and Yemen. Individuals in other countries need to contact the SSA in writing or by phone. For a list of phone numbers, visit the SSA's webpage.

Social Security Taxes

The taxes on overseas Social Security benefits are the same as taxes on benefits for retirees living in the United States. Retirees who file individual tax returns and earn between $25,000 and $34,000 may have to pay taxes on up to 50 percent of benefits. Retirees with income over $34,000 may have to pay taxes on 85 percent of benefits.

Retirees filing jointly with a combined income of between $32,000 and $44,000 may have to pay taxes on 50 percent of their benefits. Joint filers with a combined income of more than $44,000 may have to pay taxes on 85 percent of their benefits. Combined income is the retiree's adjusted gross income plus nontaxable interest plus one-half of the retiree's Social Security benefits.

In addition to U.S. taxes, some foreign countries may tax benefits as well. To find out whether a country imposes taxes on Social Security benefits, contact the country's embassy in the United States.

The SSA provides information and resources on its International Programs webpage for retirees who are moving outside of the U.S.

What About Supplemental Security Income?

The rules for receiving Social Security overseas do not apply to Supplemental Security Income (SSI) benefits. Most recipients of SSI are not entitled to benefits outside the U.S. SSI benefits will stop if a recipient is outside the U.S. for more than 30 days, and benefits won't start up again until the recipient is back in the country for at least 30 days. However, there are exceptions for dependent children of military personnel and students studying abroad.

What to Do When Social Security Overpays

According to the Social Security Administration (SSA), 69.1 million people benefit from Social Security programs, such as Supplemental Security Income (SSI) and Social Security Disability Insurance (SSDI).

Of the $1.1 trillion Social Security payments the SSA made in retirement, survivors, and disability benefits in 2021, about $1.8 billion, or 0.17 percent, constituted overpayments, AARP reports. An overpayment occurs when Social Security gives you more money in a month than you should have gotten.

Reasons for a Social Security Overpayment

Overpayments can happen when the SSA relies on incorrect or old information or makes errors.

• If you have experienced life transitions such as changes in your living situation, marital status, ability to work, or income, you may see your Social Security payments adjust. While you must update the SSA about any changes affecting your benefits, sometimes these updates face delays, and the information on file at the SSA needs correcting. This can lead to improper calculations for monthly benefits.
• In other cases, the SSA may make a processing or calculation error that causes the overpayment.

Can You Keep the Money?

When you receive an overpayment, the Social Security Administration will attempt to recover their loss. If you spend the surplus benefit, you risk not having enough money to pay back the SSA. Or, if the SSA reduces your monthly payment to compensate for the mistake, you may not have enough to cover your expenses.

Although the SSA may waive repayment, in most cases, it will seek recovery even when it bears responsibility for the overpayment. The Chicago Tribune reports that the SSA attempts to recoup significant overpayments even when the mistake persisted for years and the beneficiary spent the income.

Notice of Overpayment

The Social Security Administration will notify you if it determines that it overpaid you. According to the SSA, the notice will state the reason for the mistake and how you can pay the SSA back.

The notice will explain the steps you can take, including:

• Asking the SSA to reconsider the decision if you believe the payment was correct
• Requesting a waiver for the overpayment, allowing you to keep it
• Entering a payment agreement to pay back the amount at a different rate

Once you request reconsideration, a waiver, or a different payment rate, the SSA will pause recovery until it makes a decision.

Appealing an Overpayment Decision

If you disagree with the SSA’s claim that you received an overpayment, you may appeal the decision and ask that the SSA reconsider it. You may appeal by filing Form SSA-561, Request for Reconsideration, with your local Social Security office.

The form requires you to explain why you have not been overpaid. Should you agree you have been overpaid but disagree about the amount, you must also provide your reasoning.

Requesting a Waiver: Social Security Hardship Form

For those experiencing financial hardship, waivers are available. You may apply for a waiver if the mistake was not your fault and you cannot afford repayment. Once the SSA gives you a waiver, you can keep the money without repaying the SSA.

Use Form SSA-632, Request for Waiver of Overpayment Recovery, to seek a waiver. When you fill out the form, it asks for your income, the income of your spouse and dependents, and your family expenses, which the SSA uses to determine whether you can afford to pay.

Repaying the SSA Gradually

In the notice letter, the SSA gives a repayment rate, setting a timeline for the repayment. For those who need more time, gradual repayment is available. You’ll need to provide financial information, including how much money is in your accounts, as well as your income and expenses. Paying back the SSA over time can help you make ends meet.

Consult With Your Attorney

Seek the counsel of your attorney if you receive an overpayment notice.They can help you understand what happened and guide you to the best course of action.

What Will Your 2024 Social Security Benefits Look Like?

In 2023, recipients of Social Security benefits saw the biggest increase in decades in their monthly checks. Although their payouts will indeed rise again in 2024, the cost-of-living adjustment (COLA) will be more modest – just 3.2 percent, versus the nearly 9 percent boost in 2023.

Does COLA Only Affect Retired Workers?

Each fall, the Social Security Administration (SSA) announces changes to the annual cost-of-living adjustment for the forthcoming year.

Based in part on the consumer price index, the COLA has an impact on Social Security payouts for retirees as well as many seniors and people with disabilities who receive disability benefits.

How Much Can You Expect to Receive?

In early December, the SSA begins notifying Social Security’s roughly 66 million beneficiaries about what their monthly retirement benefits checks will total as of 2024. These notifications go out via snail mail. How much each recipient gets in their monthly payout can vary depending on such factors as one’s age, employment history, and past work earnings.

If you don’t want to wait for your mail to learn the details, you can find out how much more you will be receiving in 2024 by visiting the My Social Security online portal in December. There, not only can you obtain details on what your 2024 benefits increase will look like, but you can also carry out numerous other tasks, including estimating your spouse’s Social Security benefits, reviewing your statements, opting out of some printed mailings, or updating your direct deposit information.

As a result of the latest COLA, the monthly amount retirees will receive in their 2024 Social Security checks will, on average, be $59 higher than in 2023 – about $1,907 (up from $1,848). This equals $22,884 per year for an individual recipient.

What About My 2024 SSI Payments?

If you are among the 7.5 million people who receive Supplemental Security Income (SSI), the announcement regarding COLA will also bring your payouts up by 3.2 percent.

So, in 2024, the maximum monthly SSI benefit will rise from $914 to $943. (Maximum monthly payouts for couples receiving SSI will be $1,415, up from $1,371.) These adjustments begin earlier, on December 29, 2023.

Are These Payout Increases Enough?

Many seniors have concerns about the failure of Social Security payouts in keeping up with rising prices for everything from prescription meds to groceries. They aren’t wrong; a 2023 survey showed that benefits have effectively resulted in a 36 percent loss in buying power since 2000.

Administrators of the survey give an example of the effects: A dozen eggs in 2023 cost $4.21 on average. In 2000, the cost hovered around a dollar – that’s an increase of more than 300 percent.

Get additional details on the 2024 Social Security changes on the SSA website.

Medicare Extra Help Program Set to Expand in 2024

Seniors and disabled citizens will receive more access to the Medicare Extra Help Program as of the beginning of 2024, the federal government announced. This expansion of benefits could enable up to 3 million people to reduce their prescription drug costs.

What Is the Medicare Extra Help Program?

The Medicare Extra Help Program assists older adults and people with disabilities who have trouble paying their Medicare Part D premiums. Note that you are automatically eligible for Extra Help if you:

• receive Medicaid coverage,
• are enrolled in a Medicare Savings Program, or
• receive Supplemental Security Income.

The program was expanded through the Inflation Reduction Act, which President Biden signed in August 2022, by increasing the income limit to 150 percent of the poverty level ($21,870 for an individual and $45,000 for a family of four). When the program expands at the beginning of 2024, 300,000 participants will go from partial to full benefits. That means they will not have to pay a premium or deductible, and they will have lower, fixed co-payments on certain medications.

Expanding Access to the Program

The government estimates that nearly 3 million people who could benefit from the program are not currently enrolled. The Department of Health and Human Services will activate government agencies to increase participation. The Administration for Community Living will reach out to underserved and rural communities, while the Centers for Medicare and Medicaid Services will provide an outreach toolkit for community organizations and beneficiary advocates.

Those who participate in the Medicare Extra Help Program could save nearly $300 per year.

Where Do I Apply for Extra Help?

To apply for Extra Help, you can visit the Social Security Administration’s dedicated webpage for more information, support, and an online application.

What Is IRMAA and How Does It Affect My Medicare Premiums?

As we near retirement, we may assume that once Medicare kicks in, our medical insurance premiums will be fixed. However, many people may not realize that there are special rules regarding how much they pay for Medicare Parts B and D if they are in a higher income range.

What Is IRMAA?

If the Social Security Administration (SSA) determines you have a higher income, you will have to pay more for your Medicare Part B or Medicare Part D coverage. This surcharge  is referred to as the income-related monthly adjustment amount (IRMAA). It is paid in addition to your monthly premium amount.

Note that Medicare Part B pays for doctor visits, outpatient care, and related services. Medicare Part D is related to your prescription drug coverage.

How Is IRMAA Calculated?

To determine whether you must pay higher Medicare Part B or D premiums, the SSA bases the decision on your most recently filed tax return. Because of timing issues, this can often be your tax return from two years prior, as your most recent one may not yet be filed or in the IRS system.

If the SSA finds that you must pay a higher premium, they use a sliding scale based on your modified adjusted gross income (MAGI) to determine by how much. MAGI equals your total adjusted gross income and any tax-exempt interest income you have received in a tax year.

2023 IRMAA Brackets

The IRMAA 2023 threshold for married couples is $194,000. For any other filing status, the threshold is $97,000.

Once you cross these thresholds, you will pay more for coverage. How much more depends on how much you exceed these numbers. The SSA provides a chart to show you what you can expect in 2023.

The SSA calculates your IRMAA every year. So, while you may be subject to IRMAA for one year, you may not be subject to it the following year. If the SSA determines you will be subject to IRMAA, they inform you of this and its effect on your premium in writing.

How Will IRMAA Affect My Premiums?

Let’s start by understanding how IRMAA may affect your Medicare Part B and D premium. Usually, the split between SSA and you is 75 percent/25 percent. In other words, Medicare pays 75 percent of the premium, and you pay 25 percent. If you exceed the income thresholds, the split changes, and you may pay anywhere from 35 percent to the total cost, depending on your income level.

Again, refer to the SSA’s 2023 chart for your situation. So, for example, if you are filing taxes as a married couple and make between $194,000 and $228,000 in 2023, you will see on the 2023 chart that your Part B premium will increase by $65.90. Your Part D premium will go up by $12.20.

What If I Don’t Think I Should Be Subject to IRMAA?

What happens if your income listed on your most recently available tax return was much higher than what you are currently making or receiving? There is a way for you to inform SSA of the change in your finances.

For example, if you divorced, were laid off, or are making less money and you can document this, you can complete the Medicare Income-Related Monthly Adjustment Amount - Life-Changing Event form. This will inform SSA and ask them to reassess any imposition of IRMAA in your case.

You can also appeal the SSA’s decision where there was a change in your income but not necessarily in the form of a life event. For example, if you filed and IRS accepted an amended tax return for the year that is being used to calculate your IRMAA, you may be able to get the SSA to change its decision. Sometimes the SSA gets erroneous information about you from the IRS, and this may also be a basis to appeal.

There are a few different ways to appeal the SSA’s IRMAA determination. The appeal can be submitted in any of the following ways:

• online,
• in writing by completing a Request for Reconsideration, or
• through your local SSA office.

Speak With a Professional

If you have questions about IRMAA and your particular circumstances, it is best to speak with a professional. Timing matters, so seeking professional guidance as soon as possible after you receive notice of the IRMAA surcharge is essential.