Millionaires Stop Contributing to Social Security on March 2, 2024 (2024)

FAQs

Millionaires Stop Contributing to Social Security on March 2, 2024? ›

Most Americans contribute to Social Security year-round, but U.S. millionaires will stop paying into the critical program on March 2 —just over two months into 2024. That's because Social Security's payroll tax doesn't apply to earned income above a certain level.

Contributions to Social Security are not linked to how much money you make. Once someone reaches an income of $168,600 or more, they stop paying in. This means a millionaire's effective tax rate is less than 1 percent — and they aren't required to pay anything for their unearned investment income.

We call this annual limit the contribution and benefit base. This amount is also commonly referred to as the taxable maximum. For earnings in 2024, this base is $168,600.

In 2024, the Social Security wage base limit rises to $168,600. For 2023, the wage base was $160,200.

The amount a person receives in Social Security benefits is not directly affected by their current income or wealth. Therefore, even if someone is a millionaire or billionaire, they can still receive Social Security benefits if they have a qualifying work history.

Social Security was intended to keep people out of poverty — something that most billionaires are in no danger of. Even so, Warren Buffett and others of his net worth are eligible for these benefits.

High Earners

After their income hits a certain level, their Social Security withholding stops for the year. Officially known as the wage base limit, the threshold changes every year. The 2023 limit for paying FICA taxes is $160,200, and the 2024 limit for paying FICA taxes is $168,600.

Starting in 2024, tax Social Security benefits in a manner similar to private pension income.

A Social Security spousal rule that has been around for decades officially ends this year for everyone except those who turned 70 on Jan. 1, 2024. The rule allows recipients to switch between their benefits and their spouses to receive the maximum amount. But unless you were born before Jan.

Social Security income can be taxable no matter how old you are. It all depends on whether your total combined income exceeds a certain level set for your filing status. You may have heard that Social Security income is not taxed after age 70; this is false.

What is the highest Social Security payment? ›

The maximum Social Security check

Your maximum benefit if you file at full retirement age – between 66 and 67 – is $3,822 per month. Your maximum benefit if you file at age 70 – the age when extra benefits stop accruing – is $4,873 per month.

For 2024, the standard deduction amount has been increased for all filers, and the amounts are as follows. Single or Married Filing Separately—$14,600. Married Filing Jointly or Qualifying Surviving Spouse—$29,200. Head of Household—$21,900.

It is estimated that the $4,800 Social Security Payment is due to go out as a result of the growing cost of living adjustment as well as inflation. This is because those with low earnings, retirees, and those with disabilities have difficulty controlling their federal costs.

"Ninety-four percent of Americans contribute to Social Security all year long, but the wealthy stop paying after their first $168,600 in wage income." Common Dreams: 60 Days into 2024 and Millionaires are Already Done Paying into …

Once you turn 65, you can sign up for Medicare no matter how rich you are. Medicare Part A, which covers hospital services, is generally free. There's a monthly premium for Medicare Part B, which covers doctor visits and outpatient services.

Living on Social Security alone isn't easy, but it's the reality for many seniors in America. According to the Center on Budget and Policy Priorities, roughly 40% of Americans ages 65 and older rely on Social Security for at least half of their incomes.

Most U.S. workers are automatically enrolled in the Social Security program, but a few groups are exempt from paying taxes into the Social Security system. Members of certain religious groups are often exempt. Most foreign academics and researchers are exempt if they are nonimmigrant and nonresident aliens.

Workers pay Social Security tax up to a maximum income level, which was $160,200 in 2023. Earnings above that threshold aren't taxed for Social Security.

If you have no record of paying into the system, you will not receive payouts. If you have not reported income and evaded taxes for a lifetime, then you will receive no Social Security benefits.

But even if you never worked and therefore don't have an earnings record, you're not necessarily out of luck. If you're married (or were married) to someone who's entitled to Social Security, you can collect spousal benefits equal to 50% of your husband or wife's benefits at full retirement age.