40 States Where You’ll Feel the Biggest Social Security Increase This Year
Recent increases to Social Security and Supplemental Security Income (SSI) for millions of Americans through the annual cost of living adjustment (COLA) increased benefits to account for inflation have impacted lots of folk’s budgets.
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Social Security is a federal program, so while people in every state receive the same adjustment, some states still tax Social Security income, making those beneficiaries in the states that don’t tax them feel like they’re getting more of an increase than others.
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Estimated Payments for 2024
Since the increase was only 3.2%, compared to the 8.7% COLA in 2023 (the highest in forty years), this may have felt slim to many beneficiaries.
More than 66 million beneficiaries receive Social Security benefits and around 7.5 million receive SSI.
The average monthly benefits for 2024 are as follows:
All retired workers: $1,907 (up from $1,848)
The aged couple, both receiving benefits: $3,033 (up from $2,939)
Widowed mother and two children: $3,653 (up from $3,540)
Aged widow(er) alone: $1,773 (up from $1,718)
Disabled worker, spouse and one or more children: $2,720 (up from $2,636 )
All disabled workers $1,537: (up from $1,489)
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States That Tax Social Security
Taxing Social Security benefits can reduce the COLA and make it feel like you aren’t getting much of an increase.
The states that do this are Colorado, Connecticut, Kansas, Minnesota, Montana, New Mexico, Rhode Island, Utah, Vermont and West Virginia. As GOBankingRates previously reported, a state with an effective rate of 5% is taking $1,500 of $30,000 in benefits — not an insignificant amount if you’re living on a fixed income.
States That Don’t Tax Social Security
The states that don’t tax Social Security and where you’ll feel that increase the most, are:
Alabama
Alaska
Arizona
Arkansas
California
Delaware
Florida
Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Mississippi
Missouri
Nebraska
Nevada
New Hampshire
New Jersey
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
South Carolina
South Dakota
Tennessee
Texas
Virginia
Washington
Wisconsin
Wyoming
Changes To Earnings Limits
A few other changes have happened this year related to Social Security and SSI benefits for those who continue to work while drawing their benefits.
For one, the Social Security Administration increased the earnings limit for workers younger than the “full” retirement age to $22,320. In other words, SSA deducts $1 from benefits for each $2 earned over $22,320.
For people who reach their “full” retirement age in 2024, this earnings limit increased to $59,520. SSA deducts $1 from benefits for each $3 earned over $59,520 until the month the worker hits “full” retirement age.
There’s no earnings limit for those at “full” retirement age.
While the state you live in doesn’t matter in terms of how big your COLA is, whether you get taxed or not will make your benefits more or less robust this year.
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This article originally appeared on GOBankingRates.com: 40 States Where You’ll Feel the Biggest Social Security Increase This Year