The Social Security Administration (SSA) has announced a 3.2% cost-of-living adjustment (COLA) increase for 2024 Social Security benefits. This will be the largest COLA increase since 1982 for the average $1,800 monthly retirement payment.
Largest Social Security Raise in Decades
The SSA bases the COLA increase on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which tracks inflation. With the CPI-W rising 8.5% in 2023 due to high inflation, 2024’s COLA will be 3.2%, the highest in four decades.
This Social Security raise for 2024 will impact retirement, disability and survivor benefits. For the average monthly $1,800 benefit, the raise equals an extra $58 per month or $696 more per year.
Boosting Beneficiaries Across the Board
In addition to retirement benefits, the 2024 COLA increase will also raise Supplemental Security Income (SSI) payments by 3.2%. The average monthly SSI benefit of $841 will go up by $27 per month.
Across the board, the Social Security raise in 2024 will provide relief to beneficiaries struggling with high inflation and rising costs. Prices for food, housing, utilities and medical care have been surging, squeezing budgets.
Economic Growth Expected
This Social Security increase for 2024 is also forecast to stimulate the broader economy. When beneficiaries have more disposable income, they tend to spend it quickly. This additional economic activity spurs demand and growth.
The 3.2% COLA is the highest in 40 years precisely because inflation has been so high. But the boost to benefits will provide a counterbalance by getting more money in the hands of consumers.
The Outlook for Social Security
While the social security 2024 cola increase is positive for beneficiaries, risks around Social Security funding remain. The SSA’s Trust Fund could become insolvent by 2034 without congressional action. Potential future reforms may impact benefits.
However, for now, the confirmed 3.2% benefit increase for 2024 will be welcome news across the board. All beneficiaries will see the change reflected in their January 2024 payment.
