Certainly, the Cost-of-Living Adjustment (COLA) in the Social Security Administration (SSA) is a fundamental element for beneficiaries and retirees to maintain their purchasing power and deal with inflation. But, understanding how the COLA adjustment works can be a bit tricky.
COLA is determined based on the Urban Wage Earners and Clerical Workers (CPI-W), which monitors price changes for food, housing, clothing, transportation, and medical care. Each year, the SSA examines CPI-W data from the third quarter of the current year and compares it to the previous year’s third quarter. If there’s an increase in the index, beneficiaries receive a COLA in the following year.
Is My Social Security Check Getting a Boost?
Ever noticed that everything from your morning coffee to gas seems a bit pricier lately? That’s inflation at work, and thanks to this, Social Security beneficiaries like you are in for a treat. Fresh stats from August suggest a cost-of-living adjustment (you might have heard it called COLA) of 3.2%, as published by the Senior Citizens League.
Last year, the COLA increase was much larger, compared to what we could expect for 2024. In that period, the increase was 8.7% driven by strong inflation in the aftermath of the pandemic and in the midst of a global economy that affects the United States. Here’s the cool part: if there’s a rise in this index (and boy, there has been since 2022), you get a pay raise for every month. And we’re not talking chump change. Hang tight until Oct. 12—that’s when the final numbers for 2023’s third quarter drop.
2024 Social Security COLA Estimates
Here’s the nitty-gritty: COLA’s expected to pump up Social Security payments by 3.2%. Curious about the average monthly amounts for 2024? Let’s break it down:
- Retirees: A bump of $58, making it a cool $1,885
- Workers with disabilities: An extra $47, totaling $1,530
- Senior duos (both getting benefits): A combined hike of $95, summing to $3,067
- Widow(er): A rise of $55, amounting to $1,759
- Widow(er) playing parent to two kids: A whopping $113 more, bringing it to $3,633
Remember, these numbers get their final stamp mid-October, once the inflation data between Q3 of 2022 and 2023 is out.
Mark Your Calendars: When’s the Extra Cash Landing?
Get ready to do a happy dance every month starting January 2024. But, here’s the thing: the date depends on your birthday and when you started reaping the Social Security benefits.
- Born between 1st and 10th? Your increased payment will make its way on January’s second Wednesday.
- Birthday between 11th and 20th? Expect it on the third Wednesday.
- Celebrate between 21st and 31st? The fourth Wednesday’s your lucky day.
A Couple of Side Notes
- For folks on Supplemental Security Income, generally, the 1st of every month is payday unless it’s a holiday or weekend.
- Were you cashing in Social Security benefits before May 1997? Circle Jan. 3, 2024, on your calendar!
For the ins and outs of your benefits, give this Social Security cheat sheet a look. And if you’re wondering about applying for SSDI and SSI, we’ve got you covered there too.
Social Security SSDI and SSI Payments Are Set to Increase Too
The Social Security Administration offers two key disability benefit programs: Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI). These programs provide financial assistance to individuals who are unable to work due to a disabling condition. One common question that arises is whether these benefits increase with the Cost of Living Adjustment (COLA).
As previously stated, for the year 2024, the COLA is set to be 3.2%, which means that both SSDI and SSI beneficiaries can expect their monthly payments to increase by this percentage. Remember that SSDI is primarily for individuals who have paid into the Social Security system through their work history, while SSI provides assistance to low-income individuals with disabilities. Both programs play a vital role in supporting disabled individuals, and the COLA helps protect the real value of these benefits, making them a crucial financial lifeline for those who rely on them.