Social Security

71 Million Americans to Receive Increased Social Security Benefits in 2024

71 Million Americans to Receive Increased Social Security Benefits in 2024. Each year, Social Security beneficiaries eagerly anticipate the Cost of Living Adjustment (COLA) announcement, and in 2024, around 71 million Americans enrolled in Social Security will see their benefits increase. This boost comes as welcome news, particularly in the face of rising inflation, which has been causing financial difficulties for many.

Seniors on retirement benefits, as well as those on Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI), can expect some much-needed economic relief.

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Importance of COLA Adjustments

Without an annual COLA raise, countless Social Security recipients would find their purchasing power diminished when it comes to buying goods and services. Even with the yearly COLA adjustment, some individuals still feel that their ability to purchase has eroded over the years. Consequently, the accuracy of Social Security’s COLA calculation becomes paramount.

How Social Security Calculates COLA

The Social Security Administration (SSA) determines the COLA by considering the average inflation rates over the last three months, which includes September, August, and July of the previous year (2023). By comparing this inflation rate with the same period from the previous year, they arrive at the appropriate COLA figure.

Impact of the 3.2% COLA Increase

The COLA increase for 2024 is set at 3.2%. While this percentage remains constant for all recipients, not all of them will receive the same additional amount each month.

Varying Impact on Benefits

The impact of the COLA increase depends on the recipients’ existing payment amounts. For example, a 3.2% increase on a $1,000 benefit results in an additional $32 per month, while those with a $2,000 benefit will see an extra $64. An average payment of $1,841 will experience an increase of nearly $60. In contrast, SSI beneficiaries receiving $914 will get an additional $29 per month. It’s worth noting that this COLA increase is higher than in most previous years.

Making the Most of the Increase

While the 3.2% increase may appear modest in the face of rising prices, it remains beneficial. It’s wise to save the extra money received from Social Security and consider creating an emergency fund. Investing this additional income each month can be an excellent way to maximize the benefits.

In most cases, the COLA increase will have a positive impact. However, it’s essential to be aware that exceeding the combined income limit due to this boost may lead to a reduction in retirement benefits. For those who have not yet filed for retirement benefits, careful planning is crucial to ensure financial stability.

Cost of Living Adjustment (COLA) Raise for Social Security 2024

In 2024, Social Security beneficiaries across different categories will experience varying average monthly raises, resulting in changes to their average payments:

Retirees can anticipate a $58 increase, leading to an average payment of $1,885.
Disabled workers will see a $47 raise, bringing their payment to $1,530.
Senior couples, both receiving benefits, will enjoy the most significant increase, with a boost of $95, resulting in an average payment of $3,067.
Widows and widowers will receive an additional $55, resulting in a payment of $1,759.
Widows and widowers with two children will experience the most substantial increase of $113, leading to an average payment of $3,633 for 2024.