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2024 Cost of Living Adjustment (COLA) Announced!

Posted on Thursday, October 19, 2023
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by Russell Gloor, AMAC Certified Social Security Advisor
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39 Comments
COLA cost of living adjustment written on papers

As expected, on October 12th the government announced the Cost of Living Adjustment (COLA) for the forthcoming year. Consistent with early predictions, everyone on Social Security will receive a 3.2% bump in their gross benefit payment starting in January 2024. While this increase pales in comparison to last year’s historic 8.7% COLA increase, it is nevertheless welcome news for seniors already struggling with inflation-induced higher prices for pretty much everything purchased. For the average retiree receiving $1,907 from Social Security in 2024, the COLA will mean an extra $61 each month to help offset living costs. Those with a higher monthly Social Security payment will get more; those with a smaller check less.

How is COLA Calculated?

The annual COLA percentage of increase varies, depending on inflation as experienced in the 3rd quarter of each year. Inflation for the months of July, August, and September of the current year – measured by the Consumer Price Index for Urban Wage Earners & Clerical Workers or “CPI-W” – is compared to the same period last year, and the difference, if any, is the COLA percentage for next year. A relatively simple process, but the after-the-fact nature of a computation based on higher prices already paid leaves most seniors still struggling to make ends meet, especially as inflation continues. Already inflated prices just don’t seem to stop rising.

Is 2024 COLA Enough?

The 3.2% increase for 2024 may seem inadequate for those struggling to make ends meet, but it is higher than usual. For the two decades preceding this year, average annual COLA was about 2.5%, including several years (2010, 2011, and 2016) when no COLA increase at all was given. Inflation, when kept in check, results in a smaller COLA increase, but soaring inflation over the past several years has driven consumer prices to an all-time high, and those higher prices (measured by the CPI-W) are what caused the current higher COLA. So, is the higher COLA enough to offset inflated prices?  Well, COLA doesn’t help us recover money already spent so, in that sense, it’s not enough. But any increase in the monthly Social Security payment is welcomed by those who rely heavily on Social Security for their existence. In fact, of Americans over age 65, about 40% rely on Social Security for at least 50% of their monthly income[1], and about 14% get at least 90% of their income from Social Security.[2] So although COLA cannot recover money already spent, it is critically important to the financial wellbeing of so many American seniors. COLA will never be enough to catch up but is nonetheless crucial.

The COLA/Medicare Conundrum

Few would say annual COLA increases are not important, in many cases crucially important, to most Social Security recipients. But, as most seniors know, healthcare expenses are also a large part of their monthly budget, and the Medicare Part B premium[3] is a significant monthly expense. Here’s some bad news: the Medicare Part B premium for 2024 is going up by $9.80, from $164.90 per month in 2023 to $174.70 per month in 2024, and that will become effective in January 2024 – the same month you will see the 3.2% increase in your Social Security benefit payment. Since the Medicare Part B premium is automatically deducted from Social Security payments, instead of seeing the full 3.2% COLA increase in your January 2024 Social Security payment you’ll see an increase which is $9.80 less than 3.2%. Essentially, your 2024 gross monthly Social Security benefit will increase by 3.2%, but your net monthly Social Security payment will include a deduction for the higher Medicare premium, partially offsetting your 2024 COLA increase – an unavoidable result of Medicare premiums being deducted from Social Security payments.

Still, Social Security’s annual Cost of Living Adjustment is crucial to nearly all American seniors. Even if it sometimes seems inadequate to completely offset the inflationary damage to our pocketbooks, and even though the COLA increase will be partially offset by an increased Medicare premium, every extra dollar still counts for those who rely on Social Security.

[1] 37% of men and 42% of women over 65 get at least 50% of their income from Social Security.

[2] 12% of men and 15% of women over 65 rely on Social Security for 90% or more of their income.

[3] Medicare Part B is healthcare coverage for outpatient services, for which there is a monthly premium.

The AMAC Foundation’s Social Security Advisory Services represent a source of on-time, on-the-mark guidance for those approaching or receiving Social Security – at no cost. AMAC’s nationally accredited advisors are invaluable, helping members understand risks, benefits, timetables, and how best to access the Social Security system.

Contact us now for your free consultation!

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Marcella
Marcella
6 months ago

This is INSULTING to seniors who know that their cost of goods over the past year has gone up at least 20% in most cases, often more. Of course, the government figures COLA to minimize increases. Is that so they can give more to ILLEGAL ALIENS and FOREIGN COUNTRIES instead of to its own citizens? That was a rhetorical question!

J. FARLEY
J. FARLEY
6 months ago

This is a bunch of B** LS%%T, I want someone one to justify their calculations to me, they must be using Biden math or that new math I have heard about. The moron Obama damn near broke my wife and I in his 8 miserable years and we recovered to some degree under President Trump and then came along the lying Democrats and a corrupt voting system and lying news media, and we got DUMBA&& Joe and now we worse off than we have ever been,
This is a triple whammy, with Biden, losing everything I own and my Constitutional Rights and Civil Liberties, and mt nations sovereignty.
God Bless America, Save our Nation!

legally present
legally present
6 months ago

It is just SO WRONG that we GIVE the illegal aliens FREE health care, mother pregnant, welcomes a new US citizen, and FREE health care for her, her child, FREE WIC, and food stamps, subsidized housing, all because she made American citizens pay for her kid.

rosalie
rosalie
6 months ago

ask the congress what they get. i bet it is a hell of a lot more then we get.

Jackie
Jackie
6 months ago

Every year about this time, when we find out what our COLA is and what our Medicare is going to cost, I’m offended and insulted by the feds methods and their lack of concern for the elderly!! We send so much money all over the world and, yet, we can’t take care of our own!!! Since inflation is still high, this 3.2% is just another sick joke from the federal government!! The seniors never get a chance to catch up much less get ahead! This 3.2% doesn’t cover what the cost of gasoline is today!! So, once again, I am feeling like my government doesn’t care about me! The politicians we have now don’t have to worry about their senior years, they have become wealthy by gaming the system and taking all of us for a horrible ride!! I am running out of money, I have a sick granddaughter who I am caring for, I don’t know what to do and I feel like my federal government cares more for the illegals that they are allowing to flow into our country than they do their own suffering citizens!!!! I will never vote for a Democrat but Republicans are making it more difficult to be on their side!! I belong to neither party!!

mikem
mikem
6 months ago

billions to ukraine peanuts for the retired tax payers, shameful.

Larry
Larry
6 months ago

This country has become a mecca for illegals from all over the world who come here and get the lions share. Yet citizens of this country always wind up with the short end of the stick. This is just wrong.

DDS
DDS
6 months ago

Begin by testing every person with a member of Congress elect to take an immediate lie-detector test. Impeach every member who fails.

Mike L
Mike L
6 months ago

Interesting that only the months of “July, August & September” are used to calculate the COLA raise for the full year. So if the government can keep inflation low for just these three months, it can minimize the COLA for us social security recipients.
So when gasoline shot up 50%, groceries costs go nuts, utilities go through the roof, between January and June is doesn’t figure into the COLA. wow, what a joke.
When obama & biden said “vote for change” they meant it. We are lucky to have any change left in our pockets.

Bob L
Bob L
6 months ago

$61 covers a short list at Walmart and that doesn’t include any beef products.

LadyoftheLake
LadyoftheLake
6 months ago

Shameless Malfeasance of Social Security Administration,Congress..#AsA73 Yr Elder #HighestCostsEver #Groceries,Bills..#FailingEconomy #NationalDebt 33Trillion andSpendingOutOfControl #TheftOfSSTrustisShamefulDisgrace

Brian
Brian
6 months ago

this COLA will push retirees into a higher tax bracket. the GUBMINT gives with one hand and STEALS with the other hand!

legally present
legally present
6 months ago

So 174.70 from each of our SS checks, PLUS our PlanF premium of 440 for Hubby, and 258. for me, and mine already going up to 289/MONTH costs us 1079/MONTH, and that doesn’t include Dental, my 200/year for prescription, or vision, or hearing. So rest assured Medicare is NOT FREE, and that’s after paying into it since it’s inception in 1965. Ever since Obamacare our Medicare premiums have skyrocketed. At least we can afford it, but there are many that cannot.

Steven
Steven
6 months ago

I want to know exactly line by line how much money the Federal government politicians and all Federal government employees get every month given the Biden destruction of America! Social Security isn’t Americas problem it’s the bloated US Government and the millions of Federal employees salaries, health care, cost of living salary raises, financial bonuses, etc …all of these people are US government grifter leftists run by corrupt Republicans but mostly the entire Democrat Party…

PapaYEC
PapaYEC
6 months ago

Great. About 1/5 of inflation increase since the DNC coup. Better than nothing, I suppose.

Pat R
Pat R
6 months ago

No doubt Medicare deductible will go up this time. I wouldn’t be surprised if it doesn’t eat most of it since they didn’t take any out of the Big one last year. In fact it was lowered by a little bit.

DDS
DDS
6 months ago

My computer seems to be editing my previous comment. I intended to say that every member of Congress volunteer to take a lie…you figure it out .

Robert Zuccaro
Robert Zuccaro
6 months ago

I’m getting 3% on my military pension. When I get it, I think I’ll buy me a candy bar. Whoopee!

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