Retirees and other beneficiaries will receive 3.2% cost of living adjustment Their 2024 Social Security payments will be less than half this year’s increase now that inflation has cooled.
This comes after beneficiaries received the largest COLA increase in 40 years this year, with payments increasing by 8.7%, even more than $140 per check, generally. Next year, the average beneficiary will receive an additional $50 per month.
About 71 million people receive Social Security benefits each month, including retirement and disability benefits.
COLA is an annual adjustment to Social Security benefits to ensure they keep up with inflation. It is calculated based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), a more general measure of inflation than the overall Consumer Price Index for all urban consumers (CPI-U).
Mike Lynch, managing director of Applied Insights Hartford Fund, said that while growth over the past two years has been lower than Coke’s, next year’s growth is actually more in line with the historical average. Over the past two decades, the average Coke concentration has been 2.6%. In recent years, this ratio has been as low as 0%.
Most senior Americans rely on monthly federal benefits, especially Low-income people. Many people have no other sources of savings or income to fall back on. In 2022, the poverty rate among the elderly in the United States has increased sharply: the proportion of poor people over the age of 65 increased to 14.1% last year. According to the U.S. Census Bureau. This is up from 9.5% in 2020.
For those who haven’t retired yet, Lynch hopes the annual COLA announcement will serve as a reminder to plan for retirement and save outside of Social Security. While other generations could rely on retirement benefits in addition to Social Security, most people today cannot.
“Retirement life is really different from other generations,” Lynch said, noting that as people live longer, retirement tends to take longer. “Focus on Social Security, but also all other sources of income. We really have to do what we can from a personal savings perspective.”
Lynch recommends approaching retirees and retirees spending some time visiting the Social Security Administration’s website, SSA.gov. He said it’s a great resource to help people better plan for their retirement.
Social Security COLA over the past 10 years:
- 2024: 3.2%
- 2023: 8.7%
- 2022: 5.9%
- 2021: 1.3%
- 2020: 1.6%
- 2019: 2.8%
- 2018: 2.0%
- 2017: 0.3%
- 2016: 0%
- 2015: 1.7%
Beneficiaries will see the adjustment reflected in their January 2024 payments.
Inflation may be slowing, but the financial well-being of many seniors and others living on fixed incomes has yet to recover after two years of painful price increases. Some people are delaying retirement or returning to work to make ends meet; others are trying to cut back on spending. Health care costs are particularly onerous.
While a 3.2% increase would be welcomed by many, the purchasing power of Social Security benefits has declined by more than 30% since 2000, according to the nonprofit Alliance for Seniors, in large part due to “a lack of coke.” ”. Next year’s growth won’t do much to fix the problem.
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