In an announcement made by the Social Security Administration, more than 71 million Americans will see a 3.2% increase in their Social Security and Supplemental Security Income benefits in 2024. This adjustment, though smaller than the record 8.7% boost in 2023, will still have a significant impact on retirees.
Social Security Monthly Boost: In 2024, Social Security retirement benefits will rise, with an average increase of over $50 per month, resulting in an average monthly benefit of $1,907 for individual retirees. Couples receiving benefits will see a combined total of $3,033 per month.
COLA Determination: The 2024 cost-of-living adjustment (COLA) is based on the Consumer Price Index for Urban Wage Earners (CPI-W), looking back at inflation from the third quarter of 2022 to the third quarter of 2023. This determination helps keep retirees’ benefits in line with the rising cost of living.
Wage Base and Taxation: The maximum earnings subject to Social Security tax will increase to $168,600, with higher taxes for about 6% of workers. The Social Security tax rate remains at 12.4%, shared by workers and employers.
Medicare Part B Premium: The 2024 Medicare Part B premium has yet to be announced. Typically, this premium is deducted from Social Security checks, and changes in this premium may affect the net increase in retirees’ checks.
While this increase is welcomed by retirees, there are ongoing concerns about the financial health of the Social Security program. Funding shortfalls and proposals to adjust the annual cost-of-living calculation are being discussed in Congress.
As retirees grapple with rising prices, a bipartisan approach is needed to ensure the longevity of the program and its ability to provide meaningful support in the face of inflation.
The Social Security cost-of-living adjustment aims to keep retirees’ purchasing power intact. Still, there is a consensus that further measures may be necessary to ensure that seniors, especially those in poverty, can meet their essential living expenses.
Higher Social Security benefits, while beneficial, can also have unintended consequences, such as affecting access to assistance programs and increasing tax liabilities for some retirees.
As retirees await the 2024 Medicare Part B premium announcement, they can rest assured that some relief is on the way, helping them keep pace with rising living costs. However, discussions about the long-term sustainability of Social Security continue.