The Social Security Administration makes an annual cost of living adjustment (COLA) to your benefit based on inflation. It appears that there might be a smaller increase in your monthly Social Security payments in 2024 compared to this year’s adjustment. This update is particularly crucial for those managing their budgets carefully, as Social Security income plays a vital role in your financial stability during retirement.
Here’s what you need to know: If the cost-of-living tracks at the same rate it has been for the next couple of months, your Social Security checks could go up by around 3% in 2024*. This is the consensus estimate from industry experts and organizations that help retirees. Last year, the increase was much larger, at 8.7%, the largest such increase since 1981 due to prices rising much faster at the time.
Keep in mind, this 3% increase estimate is a little higher than the average increase we’ve seen over the past 20 years, which was about 2.6%, according to the Senior Citizens League. The government decides how much your Social Security check goes up based on the average prices of things in July, August, and September. We’ll know for sure in October when they report the exact amount.
While we might not see as big of an increase in our Social Security checks for next year, it’s still important to stay informed about how these changes might affect us. Keep an eye out for the official announcement in October and remember that even though prices might be going up more slowly, some things could still cost more. Prudent budgeting, especially in retirement, is rewarded.
Disclosures: For informational and educational purposes only and should not be construed as specific investment, accounting, legal, or tax advice. Certain information is based upon third party data which may become outdated or otherwise superseded without notice. Third party information is deemed to be reliable, but its accuracy and completeness cannot be guaranteed. Neither the Securities and Exchange Commission (SEC) nor any other federal or state agency have approved, determined the accuracy, or confirmed the adequacy of this article.