Social Security benefits to rise by 3.2% in 2024.
The Social Security Benefits Increase for 2024
Every year around this time, the Social Security Administration (SSA) announces the eagerly awaited cost-of-living adjustment (COLA) for Social Security beneficiaries. Seniors across the country eagerly anticipate this announcement, hoping it will help them keep up with the rising inflation.
The wait is over! The SSA has just announced that the Social Security benefits increase for 2024 will be a solid 3.2 percent. While this increase is smaller than last year’s, it reflects a more stable economy.
The 2023 COLA Raise
When determining the new Social Security benefits COLA for 2023, the inflation rate during the third quarter (July through September) plays a crucial role. The SSA relies on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) to calculate the inflation rate, which is recalculated monthly.
The inflation rate for this year is compared to the rate from the same period last year. The percentage difference between the two determines the new COLA rate. If there is no difference, there is no COLA increase.
When Will the Raise Come?
The new COLA payments will start in December 2023, meaning you will see the increase in your January 2024 Social Security payment.
How Much to Expect on Your January Check
The average person receiving Social Security payments can expect an additional $58 per month starting in January. According to CNET, workers with disabilities will receive around $47 more, while a senior couple receiving benefits will see an increase of about $95. A widow(er) can expect an extra $55, and a widow(er) with two children will receive an average of $113 more.
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Changes in Social Security Benefits for Higher Incomes
Individuals with higher incomes may experience a decrease in their Social Security benefits. Forbes reports that the taxable income ceiling for Social Security benefits has increased by 5.2 percent, reaching $168,600 for 2024. This increase in the ceiling means that more of your income will be subject to taxation, as compared to the previous year.
The Maximum Taxable Earnings for Social Security
If you earn more than a specified amount and receive Social Security benefits, you will be taxed on a portion of those benefits. The SSA states that retirees who have not yet reached their full retirement age but earn more than $22,320 will have their benefits reduced by $1 for every $2 earned over the limit.
Once you reach your full retirement age, you can earn up to $59,520 without any penalty. If you earn more than that, your benefits will be reduced by $1 for every $3 earned over the limit. After being at your full retirement age for one year, there are no limits on your earnings.
Supplemental Security Income Benefits
Individuals receiving Supplemental Security Income (SSI) benefits will also receive a 3.2 percent COLA increase. CNET mentions that the first benefit payment for SSI recipients will be made at the end of December this year, with payments sent earlier due to the holiday season.
The COLA May Not Be Enough
Despite the significant COLA increase this year, many seniors relying solely on Social Security benefits struggle to make ends meet. CNBC reports that rising gas and food costs are unlikely to decrease, potentially consuming the additional amount received through the COLA increase.
The Senior Citizens League claims that the COLA payments since 2000 have not been sufficient. They argue that seniors would need an additional $500 per month to maintain the same buying power they had in 2000.
Increased Medicare Costs
One factor that reduces the impact of the COLA benefit is the rising cost of Medicare premiums for Part B. The Federal Register indicates that the new rate for Medicare Part B in 2024 will be $174.70, a 6 percent increase compared to 2023. Since Medicare premiums are deducted before payment, most seniors may not even notice this increase.
Another concern highlighted by the AARP is that the cost of medical treatments is rising faster than inflation. Given that seniors require more medical care, a significant portion of their income goes towards meeting their healthcare needs.
Possible Reduced Social Security Benefits in the Future
While Social Security can currently provide a COLA increase, there are concerns about the program’s future. According to an annual report released by the Social Security and Medicare trustees in March 2023, retirement benefits could be reduced to 77 percent of the regular benefit amount.
Addressing this issue requires action from Congress. Although several proposals have been submitted to avoid a potential shortfall, no significant action has been taken so far. Additionally, the absence of a permanent leader at the SSA may hinder progress in pushing these matters through Congress.
The Maximum Social Security Benefit
At full retirement age, there is a maximum benefit that an individual can receive. For 2024, the SSA reports that the maximum benefit for an individual is $3,822 per month, an increase of $195 compared to 2023.
The Social Security benefits increase provides much-needed relief for many seniors and individuals receiving SSI benefits. If you are facing financial difficulties, consider reaching out to your local Social Security Administration office to explore additional benefits you may be eligible for. State and local programs may also offer assistance.
The views and opinions expressed are those of the authors. They are meant for general informational purposes only and should not be construed or interpreted as a recommendation or solicitation. The Epoch Times does not provide investment, tax, legal, financial planning, estate planning, or any other personal finance advice. The Epoch Times holds no liability for the accuracy or timeliness of the information provided.
How do rising healthcare costs impact the purchasing power of seniors despite the Social Security benefits increase?
T Social Security benefits are not adjusted to cover these increasing healthcare costs, seniors may experience a decrease in their purchasing power despite the COLA increase.
Overall, the Social Security benefits increase for 2024 is a positive development for seniors and individuals receiving Supplemental Security Income. The 3.2 percent COLA increase reflects a stable economy and will provide additional financial support to beneficiaries. However, it is important to recognize that the increase may not be enough to address the rising costs of living, particularly in the face of increasing healthcare expenses. As the cost of Medicare premiums continues to rise and medical treatment costs outpace inflation, seniors may still struggle to meet their financial needs.
In light of these challenges, it becomes crucial to explore other ways to support seniors and ensure they can maintain a decent standard of living. Policymakers should consider comprehensive solutions that address not only the cost of living adjustments but also rising healthcare and other essential expenses. By implementing policies that provide seniors with adequate support, we can ensure a secure and dignified retirement for all.
" Conservative News Daily does not always share or support the views and opinions expressed here; they are just those of the writer."
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