Due to the increase in the cost of living of citizens in the United States, the Social Security Administration (SSA) will make an adjustment in payments for retirees, so that they are not affected by inflation. Find out how much more they could receive by 2024.
A total of 65 million retirees and survivors have been collecting Social Security in the United States. Estimates, based on economic analysis, are clear that the adjustment for 2024 payments will be below the historic increase of 8.7% in 2023. In 2022, the COLA increase was 5.9%, an unusual percentage.
WHAT IS THE TAIL AND HOW IS IT CALCULATED?
The cost of living adjustment (COLA) is based on the increase in the Consumer Price Index (CPI-W). It is calculated each year from the third quarter of the previous year and the current one. It is released, on average, October.
The purpose of the COLA is to ensure that the purchasing power of Social Security and Supplemental Security Income (SSI) benefits is not eroded by inflation. If there is no increase, there can be no COLA.
Example: To determine the 2023 COLA, the difference between the CPI-W of 2021 and 2022 was calculated. This was 8.7%, so Social Security payments increased that amount. Thus, in 2023, retirees who earned US$1,681 began to receive US$1,827, according to the SSA table.
HOW MUCH ARE SOCIAL SECURITY PAYMENTS ESTIMATED TO INCREASE IN 2024?
In accordance with The Senior Citizens League (TSCL), a nonprofit entity that advocates for older adults, the cost of living adjustment (COLA) would be 3.2%, so payments would be increased by that percentage for retirees and survivors from the Social Security Administration. The measure also applies to beneficiaries of programs such as Supplemental Security Income (SSI).
Therefore, the entity calculates – based on consumer price data until August 2023 – that Social Security payments will have an increase of US$57.30. “A 3.2% COLA would increase a retiree’s average monthly benefit of $1,790 by $57.30″, he points out in his report published on September 13, 2023.
Previous forecast
It is worth mentioning that your previous report, June 2023the estimate was for a COLA of 3%, which would increase an average monthly benefit of US$1,787 by just over US$53.60.
WHEN WOULD COLA 2024 COME INTO EFFECT?
The COLA is announced once the Consumer Price Index (CPI-W) data for July, August and September is available for calculation purposes. The official COLA for 2024 will be announced in mid-October 2023.
The COLA would come into force in December and the new payments would apply in January 2024.