:quality(75)/cloudfront-us-east-1.images.arcpublishing.com/elcomercio/YL6PQKXTSBF7JHNTEH222YNFTY.jpg "Social Security Administration Plans Payment Adjustment to Combat Inflation for Retirees in the United States: Discover the Potential Increase by 2024")
Due to the increase in the cost of living for citizens in the United States, the Social Security Administration (SSA) is taking steps to ensure that retirees are not negatively impacted by inflation. The SSA plans to make adjustments to payments for retirees in order to offset the effects of rising prices. It is estimated that these adjustments will result in an increase in payments for retirees by 2024.
Currently, there are approximately 65 million retirees and survivors collecting Social Security benefits in the United States. Recent economic analysis suggests that the adjustment for 2024 payments will be lower than the historic increase of 8.7% seen in 2023. In 2022, the cost of living adjustment was an unusual 5.9%.
The cost of living adjustment (COLA) is based on the increase in the Consumer Price Index (CPI-W) and is calculated annually using data from the third quarter of the previous year and the current year. The purpose of the COLA is to ensure that the purchasing power of Social Security and Supplemental Security Income (SSI) benefits is not eroded by inflation. Without an increase, there can be no COLA.
To determine the COLA for a specific year, the difference between the CPI-W of two consecutive years is calculated. For example, the difference between the 2021 and 2022 CPI-W was 8.7%, resulting in a corresponding increase in Social Security payments. In 2023, retirees earning $1,681 began receiving $1,827, according to the SSA table.
According to The Senior Citizens League (TSCL), a nonprofit organization advocating for seniors, the cost of living adjustment for 2024 is estimated to be 3.2%. This would result in an increase of $57.30 in monthly benefits for retirees and survivors. The calculation is based on consumer price data until August 2023. In TSCL’s previous report from June 2023, the estimate was for a 3% adjustment, which would have increased the average monthly benefit by just over $53.60.
The official announcement of the COLA for 2024 will be made in mid-October 2023, once the CPI-W data for July, August, and September are available. The COLA would come into effect in December, with the new payments applying from January 2024.
It’s important to note that Social Security payments are made on different dates depending on the recipient’s birthdate. The first payment is for individuals born between the 1st and 10th of each month, the second payment is for those born between the 11th and 20th, and the third payment is for those born on the 21st or later in any given month.
In the unfortunate event of a beneficiary’s death, the Social Security Administration advises returning any benefits received during the month of death and subsequent months. If the payment was received by direct deposit, the bank or financial institution should be contacted to arrange a return of the funds. If the benefit was received as a check, it should not be cashed and returned promptly.
It is worth noting that the SSI program also provides supplemental payments, which vary based on state and individual circumstances. These fixed monthly amounts are designed to provide additional support to low-income individuals and care providers. The specific amounts differ from state to state, with states like New York offering an additional $87 for individuals and $104 for couples, whereas Alabama’s average supplemental payment is $120.
The SSI payment date remains fixed and cannot be changed. Those who were receiving or applied for Social Security benefits on or before April 30, 1997, or receive both Social Security and SSI, will receive their benefit on the third day of each month.
The Social Security Administration’s efforts to adjust payments for retirees in response to the rising cost of living will help protect the financial well-being of millions of Americans. These adjustments, based on the increase in the Consumer Price Index, aim to ensure that retirees and survivors can maintain their purchasing power and cover their expenses in an increasingly expensive economy.