Social Security: How much will the COLA increase be in 2024?

Many Social Security beneficiaries have been waiting for the announcement regarding the cost-of-living adjustment that will be determined this year, as this will have an effect on how much the corresponding increase will be for Social Security payments.

Now that the latest Consumer Price Index report and inflation data have been released, projections on how much the COLA could be have changed.

Every month, the Social Security Administration sends out different benefits, such as disability payments, as well as those for retired workers and survivors.

These payments vary from one beneficiary to another; however, everyone is affected by the cost of living adjustment which is determined every year, representing an increase in monthly payments.

The COLA is not a fixed amount, so the increase may be bigger or smaller from year to year.

What is COLA and how is it calculated?

The COLA is linked to the annual increase in the Consumer Price Index for Urban Wage Workers and Clerical Workers (CPI-W). In theory, the SSA takes this into consideration each year so that the purchasing power of its beneficiaries is not adversely affected by inflation.

The COLA calculation takes into account the CPI-W data from the third quarter of the previous year and compares it with that of the third quarter of the current year.

For example, to determine the 2023 COLA, the difference between the 2021 and 2022 CPI-W was calculated. This was 8.7%, so Social Security payments increased by that amount.

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Social Security: How much will the COLA increase be in 2024?

According to the most recent estimate from The Senior Citizens League, one of the nation’s largest non-partisan senior groups, Social Security’s cost-of-living adjustment for 2024 could be 3.2%.

This estimate is based on data from the consumer price index for the month of August shared by the Bureau of Labor Statistics.

While a COLA of 3.2% is significantly lower than the 8.7% in 2023, the estimate is higher than the average of the last 20 years, which has been 2.6%.

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Taking into account that the average monthly amount of Social Security checks is $1,827 in 2023, according to an SSA update in January, with a 3.2% increase, they would be around $1,885 by 2024. To get an estimate of your benefits in 2024, you can add 3.2% to your current monthly payment.

When will the increase in Social Security benefits be officially announced?

The COLA is announced once the CPI-W data, corresponding to July, August and September, are available for calculation. The official COLA for 2024 will be announced in October this year.

If last year's announcement is taken as a reference, the cost of living adjustment for next year could be announced on October 12, the day the BLS publishes the Consumer Price Index report .

The COLA would come into force in December and would be applied for the first time in Social Security and SSI payments corresponding to the month of January 2024.