(NewsNation) — As January approaches, tens of millions of older Americans are anticipating a modest increase in their Social Security benefits with the introduction of a new cost-of-living adjustment (COLA).
The Social Security COLA for 2024 is 3.2%.
The 3.2% raise aims to alleviate the impact of higher prices for essentials such as food, fuel, and various goods and services.
When will I get my payment?
Recipients should start to see the COLA increase on their monthly checks starting in January 2024.
Checks will be disbursed on scheduled Wednesdays each month. The schedule depends on your birth date and when you started receiving Social Security benefits.
Here are a few additional dates to remember:
- Wednesday, Jan. 3: Benefits for those who began receiving their payments before May 1997
- Wednesday, Jan. 10: Payments for beneficiaries with a date of birth from the 1st to the 10th
- Wednesday, Jan. 17: Payments for beneficiaries with dates of birth from the 11th to the 20th
- Wednesday, Jan. 24: Payments for beneficiaries with dates of birth from the 21st to the 31st
How much will you get in my COLA check?
Government estimates suggest the average benefit check will increase by approximately $49 in 2024, rising to $1,907, according to the agency.
For retired couples where both partners receive benefits, the average payment is expected to increase from $2,939 to approximately $3,033.
The payments for a surviving spouse with two children are projected to rise from $3,540 to $3,653.
Single elderly surviving spouses can expect an increase in payments from $1,718 to $1,773.
For workers with a disability, along with their spouse and one or more children, payments are expected to increase from $2,636 to $2,720.
Payments for all workers with a disability will see an increase from $1,489 to $1,537.
You can find out how much benefits will increase by creating an account on SSA.gov.
After verifying your account, you’ll be able to get an estimate of your retirement benefits and view how those benefits may change depending on your retirement age.
Recipients can also calculate their benefits themselves by multiplying the percentage increase by their current monthly benefit amount.
For example, if a recipient’s average monthly Social Security check is $1,790 when multiplied by 3.2% or 0.032%, their estimated 2024 COLA would increase to around $1,847.28 — a $57.28 increase.
How is it calculated?
Determining the amount of Social Security one receives involves calculating a percentage of the highest wages earned during the top 35 years of employment, considering the chosen retirement age.
The COLA is calculated using the Bureau of Labor Statistics’ Consumer Price Index (CPI-W), which measures price changes based on general consumer spending patterns.
The calculation takes into account the CPI-W data from the third quarter of the previous year and compares them with those from the third quarter of the current year.
There are calls, however, to adopt an index that reflects the spending patterns of the elderly, particularly in areas like healthcare, food, and medicine costs.
Mark Hamrick, senior economic analyst at Bankrate, highlights the importance of considering the specific needs of seniors in the COLA calculation, emphasizing their higher expenditure on medical care and out-of-pocket expenses.
How does it compare to prior years?
Although a boost, 3.2% is a smaller percentage compared to last year’s increase, reflecting a slight easing in consumer prices.
It is also the smallest increase in three years, but it’s still well above the 2.6% average over the past couple of decades.
Here is how this year’s COLA compares to previous years:
- January 2020: 1.6%
- January 2021: 1.3%
- January 2022: 5.9%
- January 2023: 8.7%
- January 2024: 3.2%
Increased Medicare premiums
The COLA, intricately tied to the Bureau of Labor Statistics Consumer Price Index, adjusts Social Security payments to align with changing economic conditions.
Kathleen Romig, the director of Social Security and Disability Policy at the Center on Budget and Policy Priorities, notes that while most people will witness higher benefit checks, increased Medicare premiums are expected to absorb a disproportionate share of the COLA for many individuals.
One premium alone is projected to rise by an estimated 6%, equating to roughly $9.90 a month.
“Seniors and people with disabilities tend to spend a greater share of their incomes on health care, and medical prices are rising faster than overall inflation,” said Romig. Despite this challenge, she emphasizes that, on the whole, individuals will still receive higher benefit checks.
Information about Medicare changes for 2024 will be available at www.medicare.gov.
