The Social Security Administration stated on Thursday morning that Social Security payouts will increase by 3.2% in 2024.
The average retirement benefit that consumers will receive starting in January will increase by around $50 per month as a result. COLAs, or cost of living adjustments, are the yearly increases.
According to the organization, Social Security recipients will begin receiving the higher benefits on December 29.
Kilolo Kijakazi, acting commissioner of Social Security, stated that benefits from Social Security and SSI will rise in 2024, which will help millions of individuals manage their expenses.
Based on the average of the inflation measurements for the months of July, August, and September, the cost of living adjustment is determined. It is specifically based on the Bureau of Labor Statistics’ Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).
The most recent inflation figures, which the government issued on Thursday, showed that the CPI-W increased 2.6% in July, 3.4% in August, and 3.6% in September.
Retirement beneficiaries can sleep a little easier at night knowing that their Social Security payouts will soon increase to help them keep up with growing prices. According to Jo Ann Jenkins, CEO of the nonprofit American Association of Retired Persons, every dollar is crucial because older Americans are still feeling the pinch when they buy groceries and gas.
The Senior Citizens League, another organization that advocates for older Americans, has asserted that higher increases are necessary, particularly for older retirees. It claims that Social Security payouts are expanding far more slowly than the prices of the products and services they require.
According to the group, individuals who retired before the year 2000 would require an additional $500 in benefits per month only to regain their 2000 level of spending power.
The SSA estimates that by 2023, nearly 67 million people will be receiving Social Security payments. Since over 90% of those over 65 were receiving those benefits as of June 30, the majority of those are retirees.
In the midst of a confluence of pandemic stimulus payments, a spike in spending and shopping, and severe supply chain issues, inflation soared to 40-year highs in 2022. The Federal Reserve responded by quickly raising interest rates as a result. The benchmark interest rate in the United States is at its highest point in more than 20 years.
Because of this, the economy has slowed down a little bit in 2023 compared to last year, but inflation is still higher than it was in the 2010s.