In 2024, Social Security recipients can expect a 3.2% Cost of Living Adjustment (COLA), marking a significant but smaller increase compared to 2023’s 8.7%.
This adjustment aims to help retirees keep up with inflation, but how much you benefit from the increase largely depends on the size of your Social Security check.
How Does COLA Work?
The Social Security Administration (SSA) calculates the annual COLA based on inflation data, specifically the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).
The 3.2% increase for 2024 means that recipients will see a bump in their monthly benefits starting in January. This adjustment aims to cover rising costs in areas such as healthcare, food, and housing.
Who Gets the Biggest Increase?
While everyone receiving Social Security benefits will see an increase, those with larger monthly checks stand to benefit the most from the 3.2% adjustment.
For example, if your current benefit is higher than average, you will receive a proportionally larger increase in 2024. Here’s a quick comparison:
| Benefit Amount | 3.2% Increase | New 2024 Benefit |
|---|---|---|
| $1,500 | $48 | $1,548 |
| $2,000 | $64 | $2,064 |
| $2,500 | $80 | $2,580 |
Those receiving higher checks, such as beneficiaries with a monthly amount of $2,500 or more, will see an increase of around $80 per month, while those receiving lower amounts, like $1,500, will only see about a $48 increase.
The Impact on Your Monthly Benefit
For the average Social Security recipient, who receives approximately $1,790, the 3.2% COLA will boost their monthly check by roughly $57.
This brings the typical benefit to around $1,847 starting in January 2024. However, the increase might not fully keep pace with rising expenses, especially in healthcare and housing.
Key Benefit Threshold for 2024
Recipients with benefits above a key threshold will notice a more significant impact. For example, if your benefit exceeds $2,000 per month, the increase will surpass $60 monthly, which could help cover more of your rising costs in 2024.
However, it’s important to keep in mind that other deductions, like Medicare Part B premiums, may offset the overall boost in some cases.
Conclusion
The 3.2% COLA in 2024 will bring much-needed relief to Social Security beneficiaries, though the size of the increase depends on your current monthly benefit.
While the adjustment helps keep up with inflation, those with larger benefits will feel the impact more significantly. As costs keep going up in areas like housing and healthcare, it’s important to plan for the extra costs and make good use of the COLA raise.
