January 1st brought some much-needed upgrades to Social Security that will hopefully make life a little easier for the millions of seniors who depend on it. The following three changes are a result of automatic adjustments the government makes to the program each year to help benefit checks keep up with the rising cost of living. They may not all affect you, but all beneficiaries will notice the effects of at least one of these.

1. Cost-of-living adjustment

This month's Social Security checks will be 3.2% higher than last month's, thanks to the latest cost-of-living adjustment (COLA). The Social Security Administration implements one of these in most years to help the value of seniors' checks keep up with inflation.

It determines the COLA by looking at changes in the third-quarter data from the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the previous year to the current year. The difference from 2022 to 2023 was 3.2%, so that became the COLA for 2024.

The first checks with the new amount went out to beneficiaries with birthdays between the first and the tenth of a month on Jan. 10, 2024. Benefits for those with birthdays between the 11th and 21st of a month will follow on Jan. 17, 2024 and all remaining beneficiaries will receive their first new-and-improved checks on Jan. 24, 2024.

2. Higher earnings test limits

The Social Security earnings test withholds benefits from seniors who earn more than a certain amount from a job while claiming under their full retirement age (FRA). This is between 66 and 67 for today's workers.

In 2023, workers who were under their FRA all year lost $1 for every $2 they earned over $21,240. And those who reached their FRA lost $1 for every $3 they earned over $56,520 if they earned this much before their birthday. But in 2024, these limits have risen to $22,320 and $59,520, respectively. This means seniors can earn more before they have to worry about hurting their benefit checks.

And in case you're wondering, money lost to the earnings test isn't gone forever. When you reach your FRA, the government increases your checks slightly to account for the amount it previously withheld.

3. Higher maximum benefit

The maximum Social Security benefit was $4,555 per month in 2023, and it's now $4,873 per month. That's an increase of about $318 per month. But unfortunately, most seniors won't qualify for this.

In order to claim the largest possible checks, you must do three things. First, you must work at least 35 years to avoid zero-income years shrinking your benefit checks. Second, you must pay the maximum amount of income subject to Social Security taxes in each of those 35 years. That means earning the equivalent of $168,600 in 2024 dollars or more each year. And then you have to delay benefits until 70. This is because the government increases your checks slightly for every month you delay claiming up until 70.

For most people the maximum Social Security benefit isn't achievable, but that's OK. No matter what your Social Security benefit is, you'll see a boost this year thanks to the COLA, and possibly the higher earnings test limits discussed above. And you can look forward to similar increases in subsequent years.

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They're Finally Here: 3 2024 Social Security Improvements We've Been Waiting For was originally published by The Motley Fool