New year, new updates, right? That’s exactly it. The usual changes are in response to the increased cost of living. I’m going to go over the recent updates and then we can focus on tips to maximize your retirement.
1. Cost of Living Adjustment for 2024: 3.2%
I hear your frustration that this small increase is not going to help with higher increases in food costs like cereal, oil, fresh veggies and fruit, and much higher increases like car insurance, car repairs, over the counter medicine, rent and quite a few other categories.
2. % contribution of your earnings towards social security. 2024 Cap is $168,600.
3. Earning limit has increased from $21,240 (2023) to $22,320 in 2024, if you haven’t reached full retirement age between 66 and 67 depending on the year you were born. If you earn above that limit, you will have to give back $1 dollar of your social security for every $2 in earnings.
4. If you reach your full retirement age in 2024, the earning limit increased from $56,520/year in 2023 to $59,520 per year. For months prior to your 2024 birthday $1 will be withheld for every $3 in earnings above the limit. Once you reach your full retirement age on your birthday, you can go to town with how much you want to earn the rest of that year.
5. 40 quarters of employment to qualify for social security. You need to earn a certain minimum per quarter. The 2024 number is 1730/quarter, which is an increase of $90 from 2023. It’s important to keep an eye on this information especially if you took time off to raise a family and did not work for a number of years. Reach out to SSA and check to see what records they have so that you are not blind sighted in your retirement planning process.
NOW WHAT CAN WE DO ABOUT THESE CHANGES/POSITIVE SPIN ON THEM:
You can’t control what the government does, so let’s focus on what you CAN control and I have action steps to help you.
Let’s keep it uncomplicated. You can 2 options. Increase income or decrease expenses.
1. Increase your income: get a part time job doing something you love, enjoy, close to where you live.
Multiple benefits: keep you busy physically and mentally, have a schedule, income coming in, social interaction.
2. Review and reduce your expenses:
- Take a look at your required expenses/budget: rent or home owned, utilities, insurance (homeowners, car), cell phone, food, medical.
- Utilities: LED light bulbs, energy efficient thermostat, get on a budget plan (same bill amount every month), shop for energy suppliers.
- Insurance: can shop insurance any time of the year (unlike medical): review coverage (to make sure sufficient coverage foremost), analyze if can increase deductible, talk to an insurance broker who can shop multiple carriers, including smaller carriers which can offer better pricing, local companies, bundle car and home for discounts.
- Cell phone plan: review if best, most efficient
- Food budget: take a look to make sure there are no unnecessary subscriptions (multiple warehouses), consider friendly smaller local stores for better pricing (Aldi, Lidl, local stands for produce)
- Medical: prescriptions costs vary among pharmacies and cheaper to get a 90 day supply through mail order, as an example.
- Utilities: LED light bulbs, energy efficient thermostat, get on a budget plan (same bill amount every month), shop for energy suppliers.
If you look at it, a small increase is better than nothing, so let’s work with what we have, enjoy life and keep hustling forward.
What are some of your strategic tips that you have implemented that helped you?
Let’s chat! bit.ly/contactolgas
CPI pricing info quoted: https://www.cnbc.com/2023/12/12/heres-the-inflation-breakdown-for-november-2023-in-one-chart.html
Fact sheet from the social security administration:
https://www.ssa.gov/news/press/factsheets/colafacts2024.pdf