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2024 Social Security COLA Boost: Discover the Estimated Increase Today!

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The Odds of a 3.2% Social Security COLA Increase in 2024


The odds moved up, based on the latest inflation data, that Social Security benefits could see a 3.2% cost-of-living adjustment next year. Not sky high but a bit better than average.

One More Month of Data Needed

To be sure, we’ll need to see one more month of data before the exact inflation adjustment will be known. The next round of Consumer Price Index data for September will be released by the U.S. Bureau of Labor Statistics on Oct. 12.

COLA Could Add Another $57 a Month

A COLA boost of 3.2% would amount to a little more than $57 extra each month for someone who is receiving $1,790 a month, the average Social Security monthly retiree benefit, according to the Senior Citizens League, a nonpartisan advocacy group. The group monitors inflation data to offer forecasts of potential COLA changes ahead. It could add up to more than $680 a month.

Better Than Expected Forecast

The forecast is better than an estimated 3% a month ago before additional inflation data was available. The group rolled out its 3.2% estimate after the consumer price index for August was released on Wednesday. Inflation picked up at the fastest pace in more than a year in August, thanks to higher gasoline prices, which accounted for more than half of the monthly increase for the inflation index. The consumer price index rose 0.6% in August — triple the pace of 0.2% in July, the Labor Department reported Wednesday. Year-over-year, inflation rose 3.7% based on the Consumer Price Index for all Urban Consumers. That’s up from 3.2% in July.

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Calculating Social Security Adjustments

The annual inflation adjustment for Social Security benefits is based on another index — the Consumer Price Index for Urban Wage Earners and Clerical Workers. To calculate Social Security adjustments, the CPI-W for July, August and September are added together and averaged. And then the figure is compared with the third quarter average from one year ago. Again, we won’t know the September figure until Oct. 12. The percentage difference between the two is the amount of the COLA. Social Security recipients would see extra money each month beginning with the checks received in January 2024, according to an explanation by the Senior Citizens League.

Impact of Medicare Part B Premiums

How much money really shows up, though, will depend on the next hike in Medicare Part B premiums, which would be announced later in 2023. That extra premium cost will take a chunk of money out of any inflation adjustment. The Medicare trustees projected in March that the standard monthly Part B premium could go up $10 a month to $174.80 in 2024 for the standard monthly premium. A final number could be released in November or earlier. It’s possible another $5 could be added to premiums to cover significant new administrative and monitoring costs associated with a new Alzheimer’s drug, lecanemab, which is known by the brand name Leqembi, according to the Senior Citizens League.

Number of Social Security Recipients

About 71 million people nationwide received Social Security benefits and/or Supplemental Security Income benefits as of June, according to Social Security data. In Michigan, about 2.3 million people were receiving a Social Security benefit and about 250,000 people were receiving SSI, based on the latest data through December.

Comparison to Previous Inflation Adjustments

A 3.2% inflation adjustment for Social Security benefits remains higher than the average for the past 20 years — which was 2.6%, according to the Senior Citizens League. The inflation adjustments were modest before the COVID-19 pandemic hit, the supply chains unraveled and federal stimulus payments flooded cash into the economy. During 2020, the inflation adjustment for Social Security benefits was 1.6%. It was followed by a 1.3% hike to payments in 2021. Even so, the estimated COLA change for 2024 would be much lower than the 8.7% received in 2023 and the 5.9% in 2022.

Impact of Inflation on Seniors

Seniors, like others, are dealing with higher costs for food, rent, and gasoline. Food prices were up 3.7% year over year in August and shelter was up 7.3%.

Federal Reserve’s Fight Against Inflation

The Federal Reserve has been fighting inflation by raising interest rates to cool down demand. The first rate hike hit in March 2022 — and the Fed raised rates 10 more times after that. The Fed last raised rates by a quarter of a percentage point on July 26. The federal funds rate — which directly influences a variety of rates including those on credit cards, private student loans, small business loans, and home equity lines of credit — now finds itself in a target range of 5.25% to 5.5%. The federal funds rate now sits at the highest level in 22 years. The next Fed meeting is Sept. 19 and Sept. 20. While inflation heated up in August, many economists still expect the Fed to pause and not raise rates in September. But many aren’t ruling out another rate hike later this year.


Inflation, while cooler than its 9.1% peak in June 2022, remains top of mind for most consumers. And figuring out the next COLA hike for Social Security benefits remains on the radar.

Contact Information

Contact personal finance columnist Susan Tompor: [email protected]. Follow her on Twitter @tompor.

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