After two years of significant increases in Social Security payments, beneficiaries are bracing for a more moderate raise next year. According to AARP, The Social Security Administration (SSA) uses an inflation measure to determine this yearly adjustment, and the early figures for July suggest a 2.6 percent increase. While this is just the first step in calculating the final figure, experts estimate the 2024 increase will be around 3 percent.
Although a 3 percent raise may not sound impressive, it’s important to understand that this adjustment is designed to keep pace with rising living costs, as measured by the Consumer Price Index (CPI). For those on fixed incomes, this is significant news. The increase applies to all Social Security benefits and will start in January 2024, with December payments.
Social Security adjustments are closely linked to the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which tracks changes in the prices of various goods and services. The SSA calculates the adjustment by comparing the average CPI-W for July, August, and September of each year to the previous year’s figures. If projections hold, next year’s increase will return to the pre-pandemic era of around 2.2 percent.
However, it’s worth noting that if there’s no inflation, there will be no increase, as seen in certain years in the past. The highest-ever adjustment was an impressive 14.3 percent in 1980.
In summary, while the expected 2024 increase may appear modest, it’s a crucial indicator of inflation trends and provides stability for those relying on Social Security benefits. Changes in inflation affect how far these benefits can go. Recent data suggests inflation is stabilizing, offering hope for Social Security recipients. Still, factors like healthcare costs and Medicare premiums may influence the final benefit amounts for 2024, making it essential for beneficiaries to stay informed
For more information visit:
“Social Security COLA 2024: How Much Will Benefits Increase Next Year?.” AARP, . https://www.aarp.org/retirement/social-security/info-2023/cola-estimate-2024.html?cmp=EMC-DSM-NLC-OTH-WBLTR-1532702-1879901-7527436-NA-08212023-Webletter-MS1-SAPLASOCSEC-NA-PR59-SocialSecurity&encparam=sGN7xUI%2bh1WsgUiD7FvhoDFrltAqdRRh09h2EDR5pUIwQNYijHWeIGouC5JHgppz
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