Washington—— Benefits for millions of Social Security recipients will increase by 3.2% in 2024, well below this year’s historic increase and reflecting slowing consumer prices.
The Social Security Administration said Thursday that a cost-of-living adjustment (COLA) means the average recipient will see more than $50 more in monthly payments starting in January. AARP estimates an increase of $59 per month.
“This will help millions of people make ends meet,” said Kilolo Kijakazi, acting commissioner of the Social Security Administration.
About 71 million people, including retirees, people with disabilities and children, receive Social Security benefits.
Before Thursday’s announcement, benefits had increased 8.7% this year as a result of a 40-year record of high inflation, which has pushed up consumer goods prices. Growth will be significantly smaller next year as inflation eases.
Martha Shedden, president of the National Register of Social Security Association, said: “This will feel small compared to last year’s 8.7 per cent increase and is not seen as keeping pace with inflation and the challenges retirees still face. Higher costs.” Security Analyst.
On top of that, Medicare premiums are expected to increase in 2024, which will impact Social Security’s increased cost of living.
Medicare has not announced cost increases for traditional Medicare but said costs for Medicare Advantage plans are expected to remain stable.
Still, veteran advocates applaud the annual Social Security adjustments.
“Retirees can get a little rest at night knowing their Social Security checks will soon increase to help them follow,” said Jo Ann Jenkins, CEO of AARP. “We know older Americans are still feeling the sting when it comes to buying groceries and gas, so every dollar counts.”
Social Security is funded through payroll taxes levied on workers and their employers. The maximum amount of income subject to Social Security payroll taxes in 2024 will rise from $160,200 in 2023 to $168,600.
Retirees whose only income comes from Social Security do not pay taxes on that income.
Nancy Altman, president of Social Security Works, an advocacy group for Social Security programs, said COLA “is a reminder of the unique importance of Social Security” and that “Congress should pass legislation to protect and expand benefits.”
However, the program will face severe funding shortfalls in the coming years.
The annual Social Security and Medicare trustees’ report released in March said the program’s trust fund would be unable to pay full benefits starting in 2033. If the trust fund is exhausted, the government will only be able to pay out 77% of scheduled benefits, the report said.
There have been legislative proposals to strengthen Social Security, but they have not yet passed committee hearings.
A March poll from The Associated Press-NORC Center for Public Affairs Research found that a majority of U.S. adults oppose proposals to cut Medicare or Social Security benefits, with 79% of respondents saying they opposed reducing the size of Social Security benefits.
The Social Security Administration still has no permanent leader. President Joe Biden nominated former Maryland Gov. Martin O’Malley to lead the agency in July.
COLA is calculated based on the Consumer Price Index (CPI) from the Bureau of Labor Statistics. But there have been calls for the agency to use a different index, the CPI-E, which measures price changes based on seniors’ spending patterns such as health care, food and drug costs.
Any changes to the calculations would require congressional approval. But with decades of inaction on Social Security and the House stalled after the ouster of Rep. Kevin McCarthy, R-Calif., seniors and their supporters say they don’t believe any kind of change will be easy. Get approved soon.
The cost-of-living adjustment will have a significant impact on people like 83-year-old Louisiana resident Alfred Mason. “Any increase is welcome because it supports what we’re going through,” Mason said.
With inflation still high, anything to increase his income “would be very much appreciated,” he said.