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New government inflation data suggests a 3.2% Social Security cost of living adjustment in 2024, according to a report by a new estimate from the senior league.
This would increase the average monthly retirement pension by about $57.30said the non-partisan senior group.
The Senior Citizens League’s calculations are based on a current average retirement benefit of $1,790. That’s lower than that Average $1,837 According to Mary Johnson, Social Security and Medicare policy analyst at The Senior Citizens League, a monthly retirement benefit is cited by the Social Security Administration because it includes spousal and other dependent benefits in addition to those of employees.
The projected Social Security COLA of 3.2% for 2024 is much lower than the official increase of 8.7% for beneficiaries in 2023. But it is higher than the annual average increase of 2.6% over the last 20, according to Johnson years.
Before you factor in the impact of the estimated 3.2% increase on your 2024 benefits, keep three things in mind.
1. The official COLA for 2024 should be announced in October
The Senior Citizens League’s COLA estimate of 3.2% is based on consumer price index data through August.
An official COLA for 2024 is expected to be announced by the Social Security Administration in October.
This official calculation is based on inflation data for July, August and September from the Consumer Price Index for Urban Wage Earners and Office Workers (CPI-W).
The data from these three months is added and averaged and then compared to the average for the third quarter of 2022. If there is a spike, that determines the size of the COLA.
“At this point there is always the possibility that inflation will do something completely unexpected,” Johnson said, which could affect the official benefit adjustment for 2024.
According to Johnson, there is a 61% chance that the 2024 COLA will be 3.2%.
There is now a 9% chance it will go higher and a 30% chance it could go lower, she said.
Medicare Part B premiums are typically deducted directly from Social Security checks.
Consequently, the size of these premiums impacts how much COLA beneficiaries can see.
Medicare Part B premium rates also change every year. Medicare trustees have projected that the average monthly premium could be $174.80 in 2024, up from $164.90 in 2023.
Certain factors, particularly a B. a new Alzheimer’s drug, may affect the cost and amount of Part B premiums.
The Senior Citizens League estimates that Leqembi’s Alzheimer’s treatment could increase the average monthly Medicare Part B premium by $5 per month next year.
Medicare Part B premium rates for the following year are typically announced in November.
3. Think twice before claiming benefits this year
If you’re close to claiming Social Security retirement benefits, you might be tempted to file this year to get the record 8.7% increase for 2023.
But experts believe this is a misguided strategy.
“You don’t have to start now to benefit from a cost of living adjustment,” says Bruce Tannahill, director of estate and business planning at MassMutual. recently told CNBC.com.
“Social Security will adjust your projected benefits to reflect cost-of-living adjustments that occur before you retire,” he said.
Instead, it’s best to prioritize finding a claim strategy that fits your circumstances and maximizes your monthly benefit income.
Even though the inflation rate has fallen, current Social Security recipients are still dealing with higher prices due to inflation, especially when it comes to housing, food and medical costs, which Johnson said account for about 80% of retirees’ expenses.
“Nobody is out of the woods,” Johnson said. “Nobody gets rich with an 8.7% COLA.”
https://www.cnbc.com/2023/09/13/social-security-cola-2024-retiree-benefits-may-increase-57-per-month.html Pension benefits may increase by $57 per month