Social Security Benefits Will Inch Up in 2024
November 2, 2023
What a difference a year makes.
Social Security laws stipulate that the amount of money paid to Americans who receive Social Security benefits (retirement and disability) must be adjusted annually for inflation.
To calculate the Social Security cost-of-living adjustment (COLA), the Social Security Administration (SSA) uses a measure of prices called the Consumer Price Index for Urban Wage Earners and Clerical Workers. It focuses specifically on what the numbers showed for the third quarter of the year (July, August and September).
Enacted into law in 1973 and becoming effective in 1975, the annual COLA is intended to help Social Security beneficiaries keep pace as prices rise with inflation.
In 2023, with post-pandemic inflation still raging, Social Security recipients saw a near-record 8.7% increase in benefits.
This year, while the inflation rate is still above the Federal Reserve Bank’s target of 2%, it is subsiding. As a result, old age and disability beneficiaries will get a more modest 3.2% bump in benefits next year.
The 2024 COLA is above the 2.6% average over the past 20 years, according to The Senior Citizens League.
The Social Security Administration says, “On average, Social Security retirement benefits will increase by more than $50 per month starting in January.”
Also in 2024, the maximum monthly Supplemental Security Income (SSI) benefit will increase to $943 for an individual and $1,415 for an eligible couple.
The SSA anticipates that the 2024 average monthly Social Security benefit for all workers with disabilities will be $1,537.
Social Security recipients can expect to receive notice of their new benefit amount in early December 2023. The threshold for how much you can earn from work and still qualify for disability benefits—called substantial gainful activity (SGA)—will increase to $1,550 per month in 2024.
Critics of the measure they use—the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W)—say it is not an accurate measure of what seniors pay for goods and services.
There are increasing calls from some Washington lawmakers to change the measure for the annual increases to the Consumer Price Index for the Elderly (CPI-E), which they argue better measures the prices retirees pay.
But there are no immediate plans to change how the Social Security COLA rate is set, so it is likely the CPI-W will continue to be the standard for some time.