In a move that promises to bring a sigh of relief to millions, the Social Security retirement benefits in the United States are poised to see a notable increase in 2024. The Cost of Living Adjustment (COLA), designed to safeguard the buying power of beneficiaries against the ebb and flow of inflation, is set to augment benefits by approximately $60 per month.
COLA, a mechanism that ensures that the benefits of individuals keep pace with inflation, thereby enabling them to sustain their purchasing power, is calculated based on average inflation rates during July, August, and September. The Consumer Price Index for Urban Wage Earners and Employees (CPI-A) is pivotal in this calculation, comparing the third quarter of the current year with that of the previous to determine the new COLA.
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How is the COLA calculated?
While the official rate of increase for 2024 is yet to be unveiled, expert predictions, such as those from the Senior Citizens League, anticipate a 3.2% rise. This figure is notably less than the 8.7% surge in 2023, which was propelled by a sharp uptick in consumer prices in August.
The impact of this adjustment is far-reaching, with an estimated 70 million beneficiaries standing to gain from the forthcoming adjustment. Preliminary calculations suggest that the average retirement check, currently standing at $1,827, could potentially escalate to roughly $1,885 by January 2024. However, it’s vital to note that these figures, while promising, remain speculative until the Bureau of Labor Statistics releases the official announcement expected this October.
Beneficiaries of the Supplemental Security Income
Beneficiaries of the Supplemental Security Income program are advised to manage their expectations judiciously. The anticipated increase for this demographic is expected to be more subdued. As the exact figures are yet to be officially disclosed, beneficiaries are encouraged to remain patient and maintain a pragmatic outlook for the near future.
In a climate of economic uncertainty and rising costs, every increment, however modest, seeks to offer additional financial relief and assistance to those who rely on it. Staying abreast of these changes and being prepared is crucial in effectively navigating one’s financial future amidst the evolving economic landscape.