Social Security COLA and Medicare Part B Changes in 2024, #172

Retire With Ryan

A plethora of changes for Social Security and Medicare Part B premiums were recently announced and I want to break them down for you. On this episode, we’ll take a look at the 2024 Social Security cost-of-living adjustment (COLA), changes to Medicare Part B, and other Social Security shifts that could impact your retirement.

You will want to hear this episode if you are interested in...

• Diving into the 2024 Social Security cost-of-living-adjustment [1:22]
• Changes for Medicare and Part B premiums [4:38]
• Increases to the Social Security Wage Base [8:06]
• Does COBRA count as creditable coverage instead of signing up for Medicare? [10:03]

Understanding 2024’s Social Security COLA

Starting in January of next year, Social Security beneficiaries will receive a 3.2% increase in their benefit checks. While it's slightly less than the substantial 8.7% bump we saw last year, it's still higher than the historical average of 2.8% for cost-of-living adjustments. This increase is determined by measuring the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) during the third quarter and comparing it to the previous year. The days of a 3% minimum rule from the 1970s are long gone, and now COLAs happen automatically based on the yearly rise of the CPI-W.

The best part is, you don't need to rush to contact Social Security. They'll be sending out notifications by mail in early December with your updated monthly benefit amount. If you're eager to stay ahead of the game, you can visit the Social Security website at ssa.gov to set up email or text notifications. So, whether you're already receiving Social Security or planning to start, rest assured that the 2024 COLA will factor into your benefits, providing a little extra financial security in an ever-changing world.

Changes for Medicare Part B and IRMAA charges

Significant changes are afoot for Medicare Part B premiums in 2024, impacting current and prospective beneficiaries. The base premium for Medicare Part B will increase from $164.90 in 2023 to $174.70 in 2024. This shift comes after a slight decrease in Part B premiums last year, providing some respite for Social Security recipients. However, the waters get murkier with the introduction of IRMAA (Medicare Income-Related Monthly Adjustment Amount) charges, which can further inflate Part B premiums. These additional charges range from $69.90 to $419.30, depending on your income, and the thresholds for IRMAA triggers have also been raised for 2024.

Single filers with incomes exceeding $103,020 and married couples filing jointly with incomes over $206,000 will find themselves subject to IRMAA. You need to keep an eye on your income and explore strategies to mitigate IRMAA charges, as these adjustments also apply to Part D prescription drug plans for those on Original Medicare with Medigap coverage. Remember, informed financial planning is the key to navigating these changes effectively. Listen to this episode for more on Social Security changes in 2024!

Resources Mentioned

• Retirement Readiness Review

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