Americans who are on Social Security will soon be able to take advantage of the latest 2024 COLA boost. Good news at last, since inflation is causing lots of financial difficulties. Seniors on retirement benefits as well as SSDI or SSI beneficiaries will get some economic relief.
If there were no annual Cost of Living Adjustment (COLA) raise, countless Social Security recipients would experience a reduction in their ability to purchase goods and services. Even with the yearly COLA adjustment, some individuals feel that their purchasing power has diminished over the years.
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That is why it is so important that Social Security works out the right amount every year. Anyway, some feel that the 3.2% is too low when compared to the 2023 COLA boost.
How does Social Security calculate COLA?
The Administration uses the average inflation rates over the last three months. So, SSA takes into account the inflation of September, August, and July from the year 2023.
Then, once they have the inflation rate for that period, they compare it with the same term but in the previous year. By doing so they can see what the right amount is.
The thing is that benefits will increase by 3.2%. This means that the percentage is the same for all recipients but not all of them will cash the same extra money every month.
#ICYMI More than 71 million Americans will get a 3.2% increase in monthly #SocialSecurity benefits and #SSI payments in 2024. For more info, visit our blog here: https://t.co/2RWlgZ4aL7 #COLA #2024COLA pic.twitter.com/NOY8PDiF8m
— Social Security (@SocialSecurity) October 14, 2023
How will the Social Security boost impact on benefits?
Since the 3.2% of 1,000 dollars is $1,032 and the 3.2% of $2,000 is $2,064, you can learn something from it. The higher your payment is, the more dollars you will get additionally. While those with a check worth $1,000 get 32 dollars extra, those earning $2,000 get $64.
For example, an average payment of $1,841 can get nearly 60 dollars. Whereas SSI beneficiaries with just 914 dollars could get $942, 29 dollars more per month. Anyway, it is important to point out that this COLA jump is higher than in most years.
Although it may seem too low because of exorbitant prices, it is still beneficial. Save the extra money you will get from Social Security and make an emergency fund. Investing it every month would be a great way to make the most of this pay rise.
Choosing when to retire is an important decision and involves many factors you may want to consider. Find out now how Social Security can help you achieve your retirement goals: https://t.co/8hO9Mv6u7W pic.twitter.com/hqLNALCxLS
— Social Security (@SocialSecurity) October 25, 2023
In general, it will have a positive impact in most situations. Unless you exceed the combined income limit due to this boost. Then, you may get a reduction of your retirement benefits. If you have not filed yet for retirement benefits, make sure you have planned everything properly.
Cost of Living Adjustment (COLA) Raise for Social Security in 2024
In 2024, various categories of Social Security beneficiaries will receive different average monthly raises, impacting their average payments.
Retirees can expect a $58 increase, resulting in an average payment of $1,885. Disabled workers will see a $47 raise, bringing their payment to $1,530. Senior couples, both receiving benefits, will experience the most substantial increase with $95, leading to an average payment of $3,067. Widows and widowers will receive $55 more, resulting in a payment of $1,759. Those widows and widowers with two children will have the highest increase of $113, resulting in an average payment of $3,633 for 2024.