Social Security recipients are set to receive a 3.2% increase in their benefits in 2024, significantly lower than the previous years’ adjustments.
While this may seem like good news, it’s actually less beneficial when compared to the high increases seen in 2022 and 2023, driven by elevated inflation rates.
Here’s everything you need to know about the latest Social Security check increase and what it means for beneficiaries.
Understanding the 2024 COLA Increase
The Social Security Administration (SSA) announced that the 2024 Cost-of-Living Adjustment (COLA) will be 3.2%, resulting in an average increase of approximately $50 per month for beneficiaries.
This is notably lower compared to the 8.7% increase in 2023, reflecting a moderation in inflation rates over the past year.
Key Figures:
| Year | COLA Percentage | Average Monthly Increase |
|---|---|---|
| 2023 | 8.7% | $144 |
| 2024 | 3.2% | $50 |
Why Is This Increase Lower Than Expected?
The lower COLA for 2024 is primarily due to a decrease in inflation, which is the main driver for these adjustments.
The COLA is calculated based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the third quarter of the previous year compared to the same period in the current year.
Impact on Beneficiaries
While the increase will slightly boost monthly benefits, it might not be enough to keep up with rising costs in essential areas such as healthcare, housing, and food.
Many seniors and disabled individuals rely heavily on Social Security, with about 30% of retirees depending on these benefits for 90% or more of their income.
Changes to Maximum Taxable Earnings
In addition to the COLA, the maximum taxable earnings for Social Security will rise from $160,200 to $168,000 in 2024.
This change means that higher earners will contribute more to the Social Security fund, which can help sustain the program but also means a higher tax burden for those individuals.
Concerns Over Adequacy of the Increase
Advocacy groups such as The Senior Citizens League (TSCL) have expressed concerns that the current method of calculating the COLA doesn’t adequately reflect the costs seniors face. They argue that the CPI-W index does not accurately represent the spending patterns of older adults, who typically spend more on healthcare.
There have been calls to adopt a different index, like the CPI-E (Consumer Price Index for the Elderly), to ensure benefits keep up with the true cost of living for seniors.
Proposed Legislative Changes
There is a proposed bill called the Boosting Benefits and COLAs for Seniors Act. If passed, it would change the COLA calculation to better reflect the expenses faced by older Americans, particularly in healthcare and housing.
This proposal aims to provide a more accurate adjustment that would help seniors maintain their purchasing power.
Conclusion
While the 3.2% increase for 2024 provides some relief to Social Security beneficiaries, it falls short of covering the rising costs many seniors face, especially in essential categories like healthcare and housing.
With inflation moderating, the smaller COLA reflects the current economic conditions but may not be sufficient for those who depend heavily on these benefits. Future legislative changes could help address these concerns and better align Social Security benefits with the real expenses of aging Americans.
FAQs
1. What is the COLA for Social Security in 2024?
The Cost-of-Living Adjustment (COLA) for Social Security in 2024 is 3.2%, resulting in an average monthly increase of $50.
2. Why is the 2024 increase lower than in previous years?
The lower increase is due to a reduction in the inflation rate, which drives the COLA calculation.
3. Will this increase cover rising living costs?
For many beneficiaries, the 3.2% increase may not be sufficient to cover rising costs in essential areas such as healthcare and housing.
4. What is the proposed change to the COLA calculation?
A proposed bill aims to change the COLA calculation to use the CPI-E index, which better reflects the expenses of seniors, particularly in healthcare.
5. How much is the maximum taxable earnings for 2024?
The maximum taxable earnings for Social Security will increase from $160,200 to $168,000 in 2024.
References
- Ground News
- MyGateway News
- Ground News
