Social Security COLA to Be 3.2% in 2024

Social Security recipients will see their benefits increase by 3.2% in 2024, the Social Security Administration announced on Thursday. This is well below the record-setting 8.7% increase that recipients received in 2023.

The annual cost-of-living adjustment, or COLA, is based on the average increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for the months of July, August, and September. The CPI-W rose 3.6% in July and 3.4% in August, which suggests that the COLA for 2024 will be around 3.2%.

While a 3.2% COLA is significantly lower than the 8.7% received in 2023, it is still higher than the average COLA of 2.6% over the past 20 years. The increase will boost the average monthly Social Security benefit for retired workers by $57.30, from $1,790 to $1,847.30.

The COLA for 2024 is a welcome relief for Social Security recipients, who have been struggling to keep up with rising inflation. The inflation rate in the United States has been above 8% for several months in a row, and many seniors have seen their expenses increase significantly.

However, some experts say that the 3.2% COLA will not be enough to keep up with inflation. The Senior Citizens League, a nonpartisan advocacy group for older Americans, estimates that seniors will need a 4.6% COLA in 2024 to maintain their purchasing power.

The Social Security Administration will officially announce the COLA for 2024 in mid-October. The increase will take effect in January 2024.

Impact on Social Security recipients

The 3.2% COLA for 2024 will have a modest impact on Social Security recipients. It will help to offset the rising cost of living, but it will not be enough to fully restore the purchasing power that seniors have lost due to inflation.

For example, a retired worker with an average monthly benefit of $1,790 will receive an additional $57.30 per month in 2024. This increase will help to cover some of the additional costs that seniors are facing, such as higher food and gas prices. However, it will not be enough to fully compensate seniors for the loss of purchasing power that they have experienced in recent months.

The COLA for 2024 is also important for seniors who are living on fixed incomes. Many seniors rely on Social Security benefits to cover their basic living expenses. The COLA increase will help to ensure that these seniors are able to maintain their standard of living.

Outlook for Social Security

The Social Security Trust Fund, which pays out benefits to retirees, is projected to be depleted by 2034. At that point, Social Security will only be able to pay out 79% of scheduled benefits.

There are a number of proposals to address the Social Security shortfall. Some proposals include raising the retirement age, reducing benefits, or increasing taxes on workers. However, there is no consensus on how to fix the Social Security funding problem.

In the meantime, Social Security recipients can expect to see their benefits increase by 3.2% in 2024. This increase will help to offset the rising cost of living, but it will not be enough to fully restore the purchasing power that seniors have lost due to inflation.

How to prepare for retirement

Social Security is an important part of retirement planning, but it is important to remember that it is not the only source of income that retirees will need. Retirees should also have savings and other investments to supplement their Social Security benefits.

Here are some tips for preparing for retirement:

·         Start saving early. The earlier you start saving, the more time your money has to grow.

·         Set realistic savings goals. How much money will you need to live comfortably in retirement? Once you know your goals, you can develop a plan to reach them.

·         Invest your savings wisely. There are a variety of investment options available, so it is important to choose investments that are appropriate for your risk tolerance and time horizon.

·         Get help if you need it. There are a number of financial professionals who can help you to develop a retirement plan and choose the right investments.

Retirement is a major life change, but it can also be a very rewarding time of life. By planning ahead, you can ensure that you have the financial resources to enjoy your retirement years.