Taxes on Social Security benefits and increased Medicare costs could impact retirees’ budgets in the new year, according to an article by Yahoo Finance.
What they’re saying: “Because Social Security recipients received a high COLA (Cost of Living Adjustment) of 8.7 percent in 2023, we expect more beneficiaries to become liable for federal income taxes on their Social Security benefits for the first time in the upcoming 2024 tax season,” said Mary Johnson, a Social Security and Medicare policy analyst for The Senior Citizens League.
- By the numbers: Retirees will receive a more modest 3.2 percent Social Security COLA in 2024. The average retirement benefit will increase by $59 a month, from $1,848 to $1,907, starting in January.
What’s next: Higher costs for Medicare may use up a chunk of that COLA bump. The standard monthly Part B rate is rising from $164.90 to $174.70, snipping about $10 a month off the COLA gain.
KFF, a nonprofit provider of health policy research, has also projected that Medicare Part D prescription drug premiums will increase to $48, up 21% from $40 in 2023.