The Social Security Cost of Living Adjustment (COLA) is an important benefit to those who depend on it for financial security in retirement. It’s designed to keep up with the rising cost of living and it’s going to be especially helpful in the next few years.
For those beneficiaries whose Social Security COLA was impacted by the low inflation of 2020, there is some relief on the horizon. According to the latest estimates from the Social Security Administration, the 2023 COLA will be 1.3%, and is expected to increase significantly to 1.9% the following year.
This is great news for beneficiaries expecting to receive a 2021 COLA that is lower than other years. In 2021, the COLA is set to be just 1.3%. This will increase slightly in 2022 to 1.7%, and then – in 2023 – should ramp up to 1.9%. But it’s the COLA for 2024 that will be the big one.
The Social Security COLA for 2024 is projected to be 2.2%. This is higher than most estimates for the 2022 and 2023 COLAs and is the highest projected COLA since 2018, when it was 2.8%. It’s also well above the 2020 and 2021 COLAs, which were just 0.3% and 1.3%, respectively.
A COLA of 2.2% means that Social Security beneficiaries will be able to keep pace with inflation and get a much-needed raise in their annual incomes. It will go into effect in January 2024, and it’s expected to last until December 2025.
The good news is that the COLA for 2024 will be the largest in recent memory, and this is a great opportunity for Social Security beneficiaries to make the most of their money. It’s important to note, however, that this projection could change and that the final figure will be determined in October 2023.
In the meantime, there are some things beneficiaries can do to prepare for the 2024 COLA. First, they should make sure they are enrolled in Social Security so that they are eligible to receive their benefits. Additionally, they should review their budget to be sure they are ready for the extra income, and plan for ways to make the most of the 2024 COLA.
The 2024 COLA will be a welcomed relief for Social Security beneficiaries, especially those who were expecting to get a much lower raise in 2021. With a projected increase of 2.2%, the 2024 COLA will be the highest in recent memory, allowing beneficiaries to keep up with inflation and get some much-needed financial security.