Anticipating the 2024 COLA Increase in Social Security. The 2024 Cost of Living Adjustment (COLA) is set to bring an increase in Social Security benefits. This crucial measure is aimed at preserving retirees’ purchasing power and preventing them from facing adverse financial situations due to inflation. However, it’s important to note that not every year witnesses an increase in Social Security benefits through the COLA, as it depends on the inflation rate.
Understanding the Significance of the COLA
The COLA directly impacts the amount retirees receive in their Social Security checks. When the COLA takes effect, it’s good news for Americans, as it ensures their benefits keep pace with rising living costs. But there are also times when the COLA remains at 0%, indicating that the inflation rate hasn’t warranted an adjustment.
[irp]The COLA and Its Relationship with Inflation
If there’s no COLA increase in a particular year, it signifies that inflation hasn’t risen sufficiently to necessitate this adjustment. Nevertheless, retirees generally appreciate these periodic increases in their pensions, even if inflation remains low. However, there are occasions when the COLA increase, though present, might not be substantial enough to cover all the rising costs.
When Can We Expect the 2024 COLA Increase in Social Security?
The 2024 COLA increase will take effect starting with the first Social Security checks in January 2024. Some lucky recipients may even see an increase in December 2023, specifically those with Supplemental Security Income benefits who have activated Direct Deposit. Due to a calendar anomaly, their payment may arrive on December 29, 2023. Subsequently, all Social Security payments in 2024 will include the COLA increase.
[irp]What Will the 2024 Cost of Living Adjustment Be?
The 2024 COLA increase is expected to be 3.2%, in line with the predictions of experts, such as the Senior Citizens League. While this increase is significantly lower than the 8.7% seen in 2023, it reflects the lower inflation rate in the preceding year. Despite the lower rate, the COLA increase remains more than sufficient to cover the current year’s inflation.
[irp]However, retirees might face challenges if inflation increases significantly before the year ends. Once the COLA is announced, it remains unchanged, so the 3.2% increase will be effective from 2024 onwards.
Implications of the 2024 COLA Increase
The maximum Social Security check will rise from $4,555 per month to $4,700 per month, resulting in an approximate increase of $150. While this increase might seem modest, it plays a significant role in maintaining retirees’ financial security. Additionally, the first recipients to benefit from the 2024 COLA will be those receiving Supplemental Security Income, with their maximum payment increasing to $943 per month.
