For the fiscal year (FY) 2023-2024, the Social Security Administration (SSA) has announced that the COLA will be 3.2%. This adjustment is designed to help Social Security beneficiaries keep pace with the rising cost of living, ensuring that their benefits maintain their real value, and people keep their current lifestyle.
COLA stands for Cost-of-Living Adjustment, and it’s great news for recipients of Social Security benefits in the United States. What does this mean for you? Well, if you receive Social Security checks, or if you’re a beneficiary of the Supplemental Security Income (SSI) program, you can expect a boost in your monthly payments starting in 2024, as well as some other programs’ recipients.
The Top Social Security Full-Retirement-Age Payment In 2024
In 2023, retired workers received an average monthly benefit of $1,848. However, in 2024, these payments are set to increase by 3.2%, resulting in an average monthly benefit of $1,907 for the typical retiree. Now, you might be wondering, what’s the maximum monthly payment for those retiring at their ‘full retirement age’ in 2024? The SSA has the answer! For individuals who choose to retire at their full retirement age, the highest possible monthly benefit will be $3,822.
The COLA index is calculated using the Consumer Price Index (CPI), which tracks the price changes of common goods and services. The COLA percentage increase is typically based on the CPI’s annual change. If the CPI goes up by, say, 3.2%, your income or benefits will also increase by that amount to maintain your purchasing power.
What’s the Best Are for Retirement? Uhmm… That Depends
While the SSA gives you the green light to start claiming your retiree payments at the age of 62, they’ve got a little golden nugget of advice up their sleeves: It’s often wiser to bide your time until you’ve reached your full retirement age. That’s when the money faucet tends to flow a bit more generously.
The full retirement age doesn’t work exactly the same for every individual. Each retiree is a different case. It varies depending on your birth year. If you happen to be a child of the 1943-1954 era, your full retirement age is a sprightly 66. But if you’re in the 1955-1959 club, that retirement age takes a gradual stroll up to 66 years and 10 months, before finally settling at a cool 67 for those born in or after 1960.
If you decide to take the plunge and retire right at your full retirement age, you’ll snag a sweet 100% of the retirement benefits owed to you. You can turn this retirement journey into a real money-making adventure by postponing your retirement until after your full retirement age, all the way up to the age of 70. So, that’s why it’s complicated to determine what’s the best age for retirement, because for everyone is different, based on their particular need and circumstances.