Social Security Cost-of-Living Adjustment Expected in 2024
New government inflation data suggests that there will be a 3.2% increase in Social Security benefits in 2024, according to The Senior Citizens League. This would raise the average monthly retirement benefit by approximately $57.30. The estimate takes into account the current average retiree benefit of $1,790. However, it’s important to note that this figure is lower than the $1,837 average monthly retirement benefit reported by the Social Security Administration, as it includes benefits for spouses and dependents.
Factors Affecting the 2024 COLA
The projected 3.2% increase for 2024 is significantly lower than the 8.7% increase beneficiaries saw in 2023 but higher than the average 2.6% increase over the past 20 years. The official COLA for 2024 will be announced by the Social Security Administration in October, based on inflation data from the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for the months of July, August, and September. There is a 61% chance that the COLA for 2024 will be 3.2%, but there is also a 9% chance of it being higher or a 30% chance of it being lower. It’s important to consider unexpected inflation that may impact the official benefit adjustment for 2024.
Medicare Part B Premiums and Their Impact
Medicare Part B premiums are usually deducted from Social Security checks, which means the size of these premiums affects the amount of the COLA beneficiaries will receive. The Medicare trustees have projected that the average monthly premium for 2024 may be $174.80, compared to $164.90 in 2023. It’s worth noting that factors like new Alzheimer’s drug treatments may affect costs and the size of Part B premiums. The announcement of Medicare Part B premium rates for the following year is typically made in November.
Considerations for Claiming Social Security Benefits
If you are considering claiming Social Security retirement benefits, it may be tempting to do so this year to take advantage of the record 8.7% boost for 2023. However, experts advise against this strategy. Social Security adjusts projected benefits to reflect cost-of-living adjustments that occur prior to retirement. Instead, it’s best to prioritize finding a claiming strategy that aligns with your circumstances and maximizes your monthly benefit income. Despite a decrease in the inflation rate, current Social Security beneficiaries still face challenges due to higher prices, especially in housing, food, and medical costs, which account for about 80% of retiree spending.
“Nobody’s getting rich from the 8.7% COLA.”
– Mary Johnson, Social Security and Medicare policy analyst at The Senior Citizens League.
It’s important to be mindful of these factors when making decisions regarding Social Security benefits.
