The Social Security Administration has announced a cost-of-living adjustment (COLA) to recipients’ monthly Social Security and Supplemental Security Income benefits. More than 65 million Americans will see the 3.2% increase in their payments beginning in January 2024.
The increase – significantly lower than last year’s 8.79% COLA which was the largest since the 11.2% adjustment in 1981 – is tied to the consumer price index for urban wage earners and clerical workers and was put in place to ensure the purchasing power of these benefits isn’t eroded by inflation. The increase of 3.2% is designed to provide benefit recipients with a COLA commensurate with overall inflation. The increase amount for 2024 is far lower than 2023’s 8.7% or 2022’s 5.9%, but still provides recipients with a nice “raise” in the next year.
According to the Social Security Administration, on average, retired workers currently collect $1,840.27 per month in Social Security payments, or roughly $22,083.24 per year. The 3.2% COLA will add about $58.88 per month to those payments or $706.66 for the year.
Keep in mind all federal benefits must be direct deposited. So, if you haven’t already started receiving benefits, you need to establish electronic transfers to your bank or financial institution. We are happy to help you get set up if needed.
You may also like to know that we’re now in the annual open enrollment period for Medicare. You have until December 7 to review your benefit choices and costs and elect new coverage if you like. Please take the time to go over your options. If you haven’t yet enrolled in Medicare, keep in mind you must do so within the seven-month period around your 65th birthday. Feel free to contact if you have any questions or need assistance.
The end of the year is a good time to review your financial plan to help ensure you’re well-positioned for next year and beyond. A disciplined, comprehensive strategy remains the best approach to help you achieve your long-term financial goals. If you have any questions or concerns about your overall financial plan, please give us a call.
Material prepared by Raymond James for use by its advisors. Changes in tax laws or regulations may occur at any time and could substantially impact your situation. You should discuss any tax or legal matters with the appropriate professional. Investing involves risk, and you may incur a profit or loss regardless of the strategy selected.
The consumer price index for urban wage earners and clerical workers (CPI-W) is a monthly measure of the average change over time in the prices paid by urban wage earners and clerical workers for a market basket of consumer goods and services.