Millions of Social Security recipients will get a 3.2% increase in their benefits in 2024, according to the Associated Press, far less than this year’s historic boost and reflecting moderating consumer prices.
The cost-of-living adjustment (COLA) means the average recipient will receive greater than $50 more every month beginning in January, the Social Security Administration said today. About 71 million people — including retirees, disabled people, and children — receive Social Security benefits.
Today’s announcement follows this year’s 8.7% benefit increase, brought on by record 40-year-high inflation, which pushed up the price of consumer goods. With inflation easing, the next annual increase is markedly smaller.
Still, senior advocates applauded the annual adjustment.
Social Security is financed by payroll taxes collected from workers and their employers. The maximum amount of earnings subject to Social Security payroll taxes will be $168,600 for 2024, up from $160,200 for 2023.
The social insurance program faces a severe financial shortfall in coming years. If the trust fund is depleted, the government will be able to pay only 77% of scheduled benefits. There have been legislative proposals to shore up Social Security, but they have not made it past committee hearings.
The COLA is calculated according to the Bureau of Labor Statistics’ Consumer Price Index, or CPI, but there are calls for the agency to instead use a different index, the CPI-E, which measures price changes based on the spending patterns of the elderly, like health care, food, and medicine costs.
Any change to the calculation would require congressional approval.
