The Social Security Administration announces the cost-of-living adjustment, or COLA, for the following year every October. The COLA is determined after a review of inflation data and rate accounts. Amid ever-increasing costs, Americans living on fixed incomes may be affected by upcoming changes to Social Security benefits.
Cold inflation may be the main reason Social Security benefits will not increase in 2024. Estimates suggest that retirees will not find a proper cost-of-living adjustment anywhere in the 3% range. At around 3%, it can feel like a dip for many seniors on a tight budget.
Social Security COLA increase in 2024:
The largest COLA increase since 1981 is 8.7% in 2023. It was the highest in four decades. An additional 3% bump following the 2023 COLA would lead to only a $35 increase in the 2023 payout, creating a gain of $1,186 in 2024. 3% is considered a low rate of growth by many. “Jeremy Keil said, “COLA is directly linked to inflation although the 2024 COLA is likely to be lower.
The only reason the COLA is so high in 2023 is because inflation was higher in 2021 and 2022. 2024 cola continues to indicate a sign of cooling inflation “Prior to 2022, the 30-year COLA averaged 2.4%, so expect inflation to return to ‘normal,'” according to Keil.
3% COLA 2024 for Social Security Beneficiaries:
The Social Security program provides special benefits to millions of retired workers, spouses, survivors, and disabled workers each month. Below is an estimate for 2024 based on a 3% COLA forecast. A 3% COLA in 2024 provided below means the average retired worker could receive an additional $55.12 in monthly benefits, spouses an additional $26.79, survivors an additional $43.56, and disabled workers an additional $44.59 per month.
|Option||USD, 3% COLA|
|Children of Retired Workers||$885.58|
|Spouses of Retired Employees||$919.80|
|Spouses of Disabled Workers||$419.86|
Will COLA 2024 Keep Pace with Inflation?
According to studies by the Center for Retirement Research, Social Security benefits generally keep pace with inflation over the long term, but can lag during short-term inflation. Now 2024 inflation may cool and move below the COLA level. According to Mark Hulbert, inflation is on the way down.
Healthcare costs are coming down, but unfortunately, housing costs have gone up quite a bit, Johnson added. Inflation may drop significantly in 2024 from last year. So it can be assumed that COLA 2024 will struggle to keep pace with inflation.
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