2023-09-14 00:37:38
Each month, the Social Security Administration (SSA) sends out different benefits, such as disability payments, as well as those for retired workers and survivors.
These payments vary from one beneficiary to another; However, annually, everyone is affected by the cost of living adjustment (COLA), which represents an increase in monthly payments.
The COLA is not a fixed amount, so the increase may be more or less. Find out how the COLA is calculated and what the increase in Social Security payments will be in 2024.
What is COLA and how is it calculated?
The COLA is linked to the annual increase in the Consumer Price Index for Urban Wage Workers and Clerical Workers (CPI-W). In theory, the SSA calculates it each year so as not to affect the purchasing power of the beneficiaries.
The COLA calculation takes into account the CPI-W data from the third quarter of the previous year and compares it with that of the third quarter of the current year.
For example, to determine the 2023 COLA, the difference between the 2021 and 2022 CPI-W was calculated. This was 8.7%, so Social Security payments increased by that amount.
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Social Security: what will be the increase in COLA 2024 and how much will I charge
According to the most recent estimate of The Senior Citizens Leagueone of the largest nonpartisan senior groups in the country, Social Security’s cost-of-living adjustment (COLA) for 2024 could be 3.2%.
This estimate is based on data from the consumer’s price index for the month of August shared by the Bureau of Labor Statistics (BLS).
While a COLA of 3.2% is significantly lower than the 8.7% in 2023, the estimate is higher than the average of the last 20 years, which has been 2.6%
Taking into account that the average monthly amount of Social Security checks is $1,827 in 2023, according to an SSA update in January, with an increase of 3.2%, they would be around $1,885 dollars for 2024. To obtain an approximate your benefits in 2024, you can add 3.2% to your current monthly payment.
On this date the increase in Social Security benefits is officially announced
The COLA is announced once the CPI-W data, corresponding to July, August and September, are available for calculation. The official COLA for 2024 will be announced in October this year.
If last year’s announcement is taken as a reference, the cost of living adjustment for next year could be announced on October 12, the day the BLS publishes the Consumer Price Index report.
The COLA would come into force in December and would be applied for the first time in Social Security and SSI payments corresponding to the month of January 2024.
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