The official announcement of the COLA for 2024 is now fully official. The United States Government has stated that a figure of 3.2% is sufficient to directly address the increases in prices over the last year. This means that all Americans collecting a benefit will have to fight inflation with that increase.
While this may seem like a small increase, 3.2% may actually be enough considering inflation over the past year. Inflation has stagnated, causing prices to not rise as much as in 2022. For that reason in 2023 we are looking at 8.7% and in 2024 we will see only a 3.2% COLA.
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However, there is something we need to keep in mind. Not all recipients of some type of benefit will see a 3.2% increase in the coming year 2024. This is for federal workers who collect a benefit somewhat different from the Social Security check.
So if you have been a federal worker and currently collect a Social Security check related to this job category you should know that you will not get a 3.2% COLA, so you should watch out when calculating your benefit starting in January 2024.
WHAT WILL THE COLA INCREASE BE FOR FEDERAL BENEFIT RECIPIENTS?
Beneficiaries who get a federal retirement benefit will see a lower COLA in 2024. This is due to a direct rule that changes the COLA for federal retirees earning such a benefit.
In this sense, the general rule does not apply, but changes a bit. We can see that federal benefits work with Cost of living adjustment increases as follows:
- With a COLA bigger than the 3%, FERS retirees get 1% less than the full Cost of Living Adjustment amount.
- When the COLA increases 2%-3%, FERS retirees always get a 2% increase.
- If the COLA is 2%, FERS retirees get the whole increase.
Since we have a 3.2% increase in benefits, the final COLA for federal workers is 2.2%. While this may seem unfair, the fact is that these types of workers usually have a higher benefit than retirees who are not federal workers.
WHAT OTHER BENEFITS INCREASE WITH THE COST OF LIVING ADJUSTMENT?
It is not only federal workers’ benefits that will increase with the COLA. These workers will get an extra 2.2% starting in 2024, but all other citizens will get the full 3.2% Cost of living adjustment.
Within the benefits that will see an increase starting in 2024 we can find all those related to Social Security. Both the benefits for retirees aged 62 and those for beneficiaries retired at 65 and 67 years of age. Likewise, retirees in their 70s will also see their retirement check increase beginning in January 2024.
Similarly, disability benefit recipients will have a check increase through COLA. In this category, benefits could reach the maximum $3,743 through this increase.
Finally, SNAP and Supplemental Security Income checks will also enjoy an annual increase. On the one hand, the SNAP payment depends on the States and will begin to have the COLA added starting in October of this year. On the other hand, the Supplemental Security Income payment will see the increase starting on December 29, 2023.
This last check, the SSI check, will go from a maximum of $914 to approximately $943. But remember, we are talking about a maximum amount. Any check will go to 3.2% higher regardless of the amount.
The intention behind all this COLA increase is not so that citizens will have a lot more money or be able to get rich. The ultimate goal of the Cost of Living Adjustment is none other than to make sure that recipients of a Social Security check or federal benefit can cope with inflation as best they can.