Social Security COLA 2024: How much benefits could increase

In 2023, Social Security and Supplemental Security Income (SSI) recipients saw an 8.7% increase in benefits, the largest since 1981, as a result of annualized costs of living. adjusted for the rate of inflation.

Cola 2023 increase in average Social Security retirement benefits about $146 per month.

Now, John and other VERIFY readers are asking if COLA 2024 is expected to be as much as 2023.

Is Social Security’s next cost of living (COLA) adjustment expected to be as much as in 2023?

No, Social Security’s next cost of living adjustment (COLA) isn’t expected to be as large as 2023. But Social Security recipients will still see their monthly benefit payments increase.

The Social Security Administration (SSA) adjusts benefit amounts annually to account for inflation through a cost of living adjustment (COLA). SSA will announced COLA 2024 in October.

COLA in 2024 is expected to be around 3%, based on predictions by two Social Security experts.

The Federation of Elderly’s latest estimates for COLA 2024 it is 3%. Alicia Munnell, director of the Center for Retirement Studies at Boston University, said at the end of July that she expects COLA in 2024 to be 3.4%.

These estimates are subject to change based on monthly inflation data.

The 2024 COLA estimate is significantly less than the 8.7% increase that beneficiaries saw in 2023. That is due to inflation that spiked in 2022 but has begun to normalize again this year. .

If the 3% estimate is correct, COLA will still increase average Social Security benefits for retired workers around $55 per month by 2024.

How to calculate COLA

Cola is calculation based on percentage increase in Consumer price index for urban wage earners and clerical workers (CPI-W), a measure of inflation measured by the US Bureau of Labor Statistics (BLS). It measures the average change over time in the prices paid by workers in the “basket of consumer goods and services”.

SSA explain that COLA equals the percentage increase in CPI-W from the previous year’s Q3 average to the current year’s similar average. If there is an increment, it will be rounded to the nearest tenth of a percent. That same increase applies to monthly Social Security payments.

To determine COLA 2024, SSA will compare the CPI-W of July, August and September 2022 with the same period in 2023.

In July 2023, CPI-W increased 2.6% year on year, BLS . data display. Data for August and September are yet to be released.

COLA for SSI . programprovides monthly payments to adults and children with disabilities with limited income and resources, generally the same as Social Security payments, although they usually take effect the following month Social Security benefits increase, SSA said on its website.