Seniors are poised to receive payments of up to $4,873 in under two weeks, thanks to the 2024 cost of living adjustment (COLA) enhancing the new Social Security checks. This adjustment translates to a 3.2 percent increase in monthly benefits for retirees. For those retiring at 70, the maximum payment of $4,873 is slated for January 10.
However, the specific date of benefit distribution varies based on the recipient’s birthday. Individuals born between the 1st and 10th of a month will receive their payments on January 10. Those born later can expect their checks to arrive over the following weeks. Beneficiaries born between the 11th and 20th will witness the new payments on the third Wednesday, January 17. Americans born between the 21st and 31st will experience the COLA boost in their payments on Wednesday, January 24.
Concerns arise regarding Social Security payments
Although the 2024 Social Security payments are secure, projections indicate a potential depletion of funds for full payments by as early as 2034. This looming financial challenge is attributed to the increasing number of retirees and a diminishing workforce supporting the program. While the 3.2 percent COLA increase is uniform, the actual payment amount is contingent upon various factors such as the retirement age and the total contributions made to Social Security over the years.
The Social Security Administration disburses around $1.4 trillion annually to over 70 million recipients, with over 8 million individuals having commenced receiving benefits in the past decade, according to the SSA.
Kilolo Kijakazi, the former commissioner of Social Security who served until December 20, 2023, emphasized the vital role of Social Security in providing income protection for retirees, adults, children with disabilities, and families who lose a wage earner. Despite a history of chronic underfunding, Kijakazi asserted that Social Security remains one of the most trusted agencies in the Federal Government, having served this purpose for over 85 years.
However, the ongoing economic instability and elevated inflation in essential goods and services crucial for seniors have raised concerns about the adequacy of payments in 2024. In the previous year, the Cost of Living Adjustment (COLA) was set at 8.7 percent, reflecting substantial inflation across various necessities, from groceries to housing.
Jonathan Rosenfeld, the founder of Rosenfeld Injury Lawyers, which regularly advocates for seniors, expressed worries about the lower COLA for 2024, suggesting that the increase in Social Security payments might not be enough to keep pace with rising costs. He cautioned that seniors could face financial challenges, and the anticipated relief from the COLA might be more limited compared to the previous year.
Given that seniors typically incur higher healthcare and living expenses than the general population, the adjustment may easily fall short of covering their costs.
Jonathan Price, a national retirement practice leader at employee benefits consulting firm Segal, highlighted the diversity among seniors, emphasizing that individual expenses and side income would determine how effectively the COLA benefits each person. He stressed that the appropriateness of the annual COLA for a specific retiree depends on their unique life situation, including expenses and other sources of income.
For those relying solely on Social Security as their exclusive retirement income, the enhanced benefits are likely to offer limited support, according to Jake Hill, the CEO of DebtHammer Relief. He noted that even individuals with additional retirement income might find that the 2024 COLA does not significantly improve their financial situation.