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Social Security recipients see one 3.2% increase in their performance in 2024, the Social Security Administration announced Thursday.
The annual cost of living adjustment for 2024 will affect more than 71 million recipients of Social Security and Supplemental Security Income. These benefit adjustments are made annually to ensure benefits keep pace with inflation.
How much can retirees expect?
The change results in an estimated increase in Social Security benefits by an average of $50 per month. According to the Social Security Administration, the average monthly retirement benefit for workers will be $1,907, up from $1,848 this year.
Most Social Security recipients will see an increase in their monthly checks starting in January. SSI beneficiaries will see their December checks increase.
How much the increase in Social Security checks will be for retirees will also depend on the level of the 2024 Medicare Part B premium, which has not yet been announced.
Typically, Medicare Part B premium payments are deducted from Social Security checks. Medicare trustees have projected that the average monthly premium could be $174.80 in 2024, up from $164.90 in 2023.
The increase in output in 2024 is well below the record value An 8.7% cost-of-living adjustment for Social Security recipients saw its biggest increase in four decades this year in response to record high inflation. It is also below the 5.9% cost of living adjustment for 2022.
According to the Senior Citizens League, a nonpartisan seniors group, the average cost of living adjustment over the past 20 years has been 2.6%.
The 3.2% increase is in line with an estimate released last month by the Senior Citizens League.
The Social Security cost of living adjustment is calculated based on the Consumer Price Index for Urban Wage Earners and Office Workers (CPI-W). Third quarter data is added and averaged and then compared to the average for the third quarter of the previous year. If there is an increase, this will determine the size of the COLA.
Older Americans “still feel the pain” of inflation
The adjustment in 2024 comes as many retirees are still struggling with higher prices.
“Retirees can rest a little easier at night knowing they will soon receive an increase in their Social Security checks to keep up with rising prices,” AARP Executive Director Jo Ann Jenkins said in a statement.
“We know that older Americans still struggle to buy groceries and gas because every dollar matters to them,” she said.
Jenkins also called for bipartisan congressional action to keep Social Security strong. The program is in front of you Financing deficit in the next decade. Certain proposals to correct the program also included changing the way the annual cost of living is calculated.
The Consumer Price Index for the Elderly (CPI-E) could be a better measure of the costs faced by seniors and help them maintain their purchasing power, advocates of the change argue. However, research shows that this measurement does not necessarily result in a larger annual increase.
“We’re excited to see an increase,” Tracey Gronniger, executive director of economic security and housing at Justice in Aging, a national organization focused on addressing elder poverty, said of the 2024 COLA.
However, the increase may not be enough, particularly for seniors living in poverty, she said.
“It’s not enough in the sense that people are still trying to make ends meet and they’re still struggling to cover their housing and health care costs,” Gronniger said.
Risks of higher social security benefits
Increased Social Security benefits due to cost-of-living adjustments in recent years have caused low-income beneficiaries to lose access to the Supplemental Nutrition Assistance Program (SNAP) or rental assistance, according to The Senior Citizens League.
For others, income from Social Security benefits may have become taxable for the first time or taxes on that income have increased. Up to 85% of benefits may be taxed on this basis certain income limits that are not adjusted for inflation.
“Social Security really only replaces about 30% or less of your income before you retire, and it’s never designed to be particularly generous,” said Mary Johnson, Social Security and Medicare policy analyst at the Senior Citizens League.
“In terms of income, it’s relatively modest,” she said.