There is no limit on earnings beginning the month an individual attains full retirement age. Image: Olesia Bech/Shutterstock.com
By: FEDweek StaffKey figures are increasing for 2024 in the Social Security and Medicare programs.
Social Security—For active employees, the 6.2 percent Social Security payroll tax will apply on up to of $168,600 earnings, up from $160,200. For FERS employees, that tax cuts off at that threshold and from there on they pay only the civil service retirement contribution (which is either 0.8, 3.1 or 4.4 percent, depending on when they were hired). Above the cutoff CSRS Offset employees continue to pay their same 7 percent total (6.2 into Social Security and 0.8 into the federal retirement fund) but all the money after that point goes into the federal retirement fund instead. Employees under “pure” CSRS don’t pay the Social Security payroll tax.
For those drawing Social Security benefits, the earnings test applying to beneficiaries aged 62 through that program’s “full” retirement age (66 and eight months, for those starting to draw benefits in 2024), will rise to $22,320 from $21,240. Those beneficiaries lose $1 in Social Security benefits for every $2 in earnings through employment or self-employment above the limit. A separate earnings test applies only to earnings for months in the year an individual reaches full retirement age but prior to the individual attaining that age. One dollar in benefits will be withheld for every $3 in earnings above $59,520 up from $56,520. There is no limit on earnings beginning the month an individual attains full retirement age.
For purposes of determining the benefit offset under the windfall elimination provision—which can reduce Social Security benefits of CSRS retirees who worked long enough in each system to qualify for a benefit from each—the annual “substantial earnings” threshold will rise to $31,275 from $29,700.
Medicare—The standard 2024 Medicare Part B (physicians and related services) premium will be $174.40 a month for most enrollees, up from $164.90 in 2023. Those with annual taxable incomes above a threshold (which will be $103,000 for single filers and $206,000 for joint filers) also pay surcharges. The Part B annual deductible will increase by $14 to $240.
In Part A, which covers hospitalization and related costs, the deductible will rise to $1,632, an increase of $32. Proportionate boosts also will apply to coinsurance for periods longer than 60 days per benefit period: for the 61st through the 90th day in a benefit period, to $408 per day, and beyond the 90th day, to $816 per day.
The monthly premium for Part D prescription drug coverage will average about $35, although federal retirees who retain their FEHB coverage, as most do, typically do not enroll in Part D even if they are in Part B, because prescription drug coverage is part of FEHB plans.
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