The Social Security Cost Of Living Adjustment (COLA) is crucial for millions of retirees throughout the United States. COLA was created to ensure that retirees receive adequate, inflation-proofed income and benefits. The Social Security Commissioner recently released their estimates for the 2024 COLA, and the much-needed increase could be higher than what is expected.
The Social Security COLA The Social Security COLA is determined by the Consumer Price Index (CPI) for Urban Wage Earners and Clerical Workers (CPI-W), which is set by the Department of Labor on a yearly basis. COLA is based on a comparison of the average prices of consumer goods in the months of July, August and September of the current year compared to the prior year.
When the data from this year’s index shows an increase in prices when compared to the prior year, the COLA is then increased to match the inflation rate. This usually results in an increase in Social Security benefits for retirees. In 2021, Social Security beneficiaries received a 1.3% cost-of-living increase, which was the largest increase since 2018.
The Social Security Commissioner’s Estimates for 2024 The Social Security Commissioner recently released the projections for the 2024 COLA. The report states that the Social Security COLA for retirees is projected to be higher than anticipated. According to the Commissioner’s estimates, the COLA could increase from 1.3% in 2021 to 2.4% in 2024.
It is important to note, however, that the COLA rate is subject to change. The final rate for 2024 will not be determined until mid-2023 when the CPI-W is updated. In the meanwhile, it is important for retirees to have an understanding of the factors that influence the COLA rate in order to properly plan for their retirement income and benefits.
Conclusion The Social Security Commissioner’s projections for the 2024 COLA indicate that retirees will see a higher than expected increase in their Social Security benefits. However, the final rate for 2024 is not yet determined and may be subject to change. It is important for retirees to stay up-to-date on the factors influencing the COLA in order to plan their retirement accordingly.
