The Social Security Administration’s (SSA) Office of the Chief Actuary (OCA) is projecting that the Social Security wage base will increase from $160,200 to $167,700 in 2024 in all three of its forecasts.
Projected increase for 2024. The SSA provides three kinds of forecasts for the Social Security wage base (intermediate, low cost, and high cost). All three forecasts predict an increase from $160,200 to $167,700 in 2024, a $7,500 increase from the current wage base.
The SSA intermediate forecasts through 2031 are as follows:
- 2024 – $167,700
- 2025 – $174,900
- 2026 – $181,200
- 2027 – $188,700
- 2028 – $196,500
- 2029 – $204,600
- 2030 – $212,700
- 2031 – $221,400
- 2032 – $230,100
Comparison to last year’s projection. Actual annual increases to the Social Security wage base are announced in October based on current economic conditions. As a result, the OCA’s forecasts, especially the longer-range ones, are subject to change. Last year, the OCA’s intermediate forecast predicted that the Social Security wage base would increase to $155,100 but it actually increased to $160,200.
Depletion projected on year earlier. The OCA is projecting that the combined trust funds will become depleted in 2033, with 77% of benefits payable at that time, one year sooner than projected last year. The DI Trust Fund is not being projected to be depleted within the 75-year projection period.
Recommendation. The 2023 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds concludes that legislative action is necessary to handle the shortfalls in Social Security and Medicare. Action occurring “sooner rather than later would allow more generations to share in the needed revenue increases or reductions in scheduled benefits.” Among the options recommended by the OCA would be a change in the current payroll tax rate.
Please call us if we can answer any questions.
© 2023