Nearly three in five seniors collecting Social Security are struggling financially. (iStock)
Inflation and rising prices have hurt how far retirement savings stretch and many Americans relying on Social Security benefits struggle to make ends meet.
The average Social Security retirement payout for all retired workers as of January 2024 was $1,907, according to gobankingrates.com. Earning above that average requires working longer and drawing benefits at full retirement age.
Nearly three in five seniors collecting Social Security are struggling financially and 62% said the 3.2% cost of living adjustments (COLA) for 2024 is insufficient to cover their expenses and support their lifestyle, a recent Atticus survey said. Beneficiaries saw an extra $59 monthly starting this January based on the 3.2% COLA for 2024. The adjustment is lower than in previous years because of moderating inflation. Recipients received increases of 8.7% for 2023 and 5.9% for 2022, which were the largest since the early 1980s because of record-high inflation.
As of February 2024, these are the five states that received the most Social Security benefits, according to gobankingrates.com:
- California: $10.4 billion
- Florida: $8.5 billion
- Texas: $7.5 billion
- New York: $6.44 billion
- Pennsylvania: $5.1 billion
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These states won’t tax your benefits
More Social Security recipients may owe taxes on their benefits for the first time this tax season, according to the Senior Citizens League (TSCL).
In fact, 23% of survey participants who received Social Security for three years or more said they paid tax for the first time during the 2023 tax season. This percentage will likely increase this tax season because of the 8.7% COLA increase in 2023.
Social Security benefits are taxed when incomes surpass $25,000. This fixed threshold has never been adjusted for inflation since the tax became effective in 1984. Up to 85% of Social Security benefits can be taxable when income exceeds certain thresholds.
However, Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington and Wyoming have no income tax, which means that Social Security retirement benefits aren’t taxed at the state level, according to a recent AARP report.
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Seniors face higher medical care costs
The standard monthly cost of Medicare Part B, which most seniors and disabled people have to cover certain doctors’ services, outpatient care, medical supplies and preventive services, rose by $9.80, or 6%, to $174.70, according to Centers for Medicare and Medicaid Services (CMS).
The annual deductible for Medicare Part B beneficiaries increased by $14 to $240 this year. The Medicare Part A inpatient hospital deductible that beneficiaries pay if admitted to the hospital is $1,632, an increase of $32 from $1,600 in 2023.
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