Social Security: Will the 2024 COLA increase affect all beneficiaries?
The SSA announces a cost-of-living adjustment annually to boost payments countering the effects of inflation. Here’s who benefits from the increase…
Tens of millions of Americans rely on Social Security benefits to supplement their income each month. The vast major receive payments once they’ve reached retirement age, but payments are also sent to survivors of contributors to the program and those who are disabled.
Every year, the Social Security Administration (SSA) increases monthly payments for the various programs it oversees, including Social Security and Supplemental Security Income. The percentage of the increase depends on the Cost of Living Adjustment (COLA), which is calculated using consumer price data provided by the Bureau of Labor Statistics.
What is COLA and how is it calculated?
The COLA aims to limit the loss of purchasing power by those who receive benefits from the SSA. Last year, beneficiaries saw an 8.7 percent increase applied to their benefits as historic inflation rattled the US economy.
To determine the increase in the COLA, data from the Consumer Price Index for Salaried Workers in Urban Areas and Administrative Workers (CPI-W) for July, August, and September is compared to the average for the same months the previous year. Based on the numbers from July and August of this year, the 2024 COLA could be 3.2 percent. However, the final figure will not be known until mid-October.
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COLA increase in 2024: What other benefits does it affect besides Social Security?
Although Social Security benefits are the most affected by the COLA increase due to the large number of people who receive them, the truth is that other benefits are also affected. These are the following:
- Disability Insurance Benefits (SSDI)
- Supplemental Security Income (SSI)
- Subsidy to purchase clothing (Eligible Veterans)
- Dependency and Indemnity Compensation (DIC): For Veteran Survivors
- SNAP benefits: Help purchasing food
- Military pensions and disability payments
- Government pensions (However, the FERS increase may differ from CSRS)
The first beneficiaries to see the COLA applied are those who receive Supplemental Security Income as those checks are sent on the first of every month but given that 1 January is a federal holiday, the checks are sent at the end of December. Social Security beneficiaries will see their first checks with the COLA applied in January.