Retirees and Social Security beneficiaries, mark your calendars for January 2024! The annual Cost-of-Living Adjustment (COLA) is set to give your monthly payments a boost.

However, before you start planning how to spend that extra cash, let’s delve into the details of this 2024 Social Security COLA increase, what to expect, and how to prepare for the future.

Understanding the 2024 Social Security COLA Increase

Every year, the Social Security Administration (SSA) evaluates the COLA for Social Security payments based on inflation. The COLA is calculated using the percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers from the third quarter of the previous year to the third quarter of the current year. In simpler terms, it aims to ensure that your Social Security benefits keep pace with the rising cost of living.

2024 Social Security COLA Projection: 3.2% Increase

The latest inflation numbers, as of August, indicate that the COLA for 2024 is expected to be 3.2%, according to the Senior Citizens League. This means that your Social Security payments will receive a boost of 3.2% starting in January 2024.

When Will You Receive the 2024 Social Security COLA Increase?

If you’re wondering when you’ll start seeing the COLA increase in your Social Security checks, here’s the breakdown:

• If your born between the 1st and 10th of the month, your payment will be sent on the second Wednesday of January 2024.
• For birthdays between the 11th and 20th of the month, expect your payment on the third Wednesday of January 2024.
• If your born between the 21st and 31st of the month, your payment will arrive on the fourth Wednesday of January 2024.

How Your Earnings and Age Affect Social Security Benefits

Learn how your lifetime earnings and retirement age affect your Social Security:

1. Earnings Impact: SSA considers your highest 35 years of earnings. In 2023, for the max benefit, earn at least $160,200.
2. Retirement Age Matters: Choose wisely:
   • Age 62: $2,572 monthly
   • Ages 65-67: $3,627 monthly
   • Age 70: $4,555 monthly
   Note: Full retirement age varies; it’s 67 for those born in 1960 or later.

Preparing for a Slimmed-Down COLA in 2024

In 2024, Social Security recipients may see a smaller COLA increase. If you heavily rely on Social Security, follow these steps:

1. Diversify Income: Don’t rely solely on Social Security; diversify income streams for financial stability.
2. Budget Wisely: Adjust your budget to accommodate a potentially marginal COLA increase. Be mindful of expenses and make necessary adjustments.
3. Supplement Income: If Social Security alone won’t cover your expenses, explore part-time work or alternative income sources like investments or rentals.
4. Know Earnings Limits: Understand SSA’s earnings limits before full retirement age (e.g., $56,520 in 2024).
5. Explore Assistance Programs: Check if you qualify for programs like SNAP or Medicaid alongside Social Security.
6. Professional Advice: Consult a retirement-focused financial planner for personalized guidance, or seek free advice if on a tight budget.

Conclusion

As we approach 2024, it’s crucial for Social Security beneficiaries to prepare for a year with a potentially reduced COLA increase. While the SSA’s annual adjustments aim to keep up with inflation, the calculations might not fully align with real-world expenses. Therefore, by taking a proactive approach, you can navigate the challenges posed by a slimmer COLA and ensure your financial well-being during your retirement years.

Also Read

Shutdown of US Government Narrowly Averted by Congress