Monthly Social Security and Supplemental Security Income (SSI) benefits for more than 71 million Americans will increase 3.2% in 2024, the federal government just announced. On average, the Social Security Administration (SSA) stated that benefits will increase by more than $50 per month for retirees starting in January. While this year's increase was 8.7% due to inflation, next year's 3.2% raise will be far less because inflation moderated during 2023.
The 3.2% cost-of-living adjustment (COLA) will begin with benefits that more than 66 million Social Security beneficiaries will begin receiving in January 2024. Increased payments to more than 7.5 million SSI beneficiaries will begin on December 29, 2023. (The Social Security Administration notes that some people receive both types of benefits.)
How does this year's increase compare historically? As mentioned, the COLA amount for 2023 was 8.7%. For 2022, it was 5.9% and for 2021, it was 1.3%. There were three years (2010, 2011 and 2016) when there was no increase.
The purpose of the COLA, according to the SSA, is to ensure that the purchasing power of benefits isn't eroded by inflation. The COLA is based on inflation changes as measured by the Consumer Price Index.
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