In a recent announcement by the Social Security Administration, millions of Social Security recipients are set to receive a 3.2% increase in their benefits in 2024. This marks a substantial decrease from this year’s historic 8.7% boost, reflecting moderating consumer prices.
The cost-of-living adjustment (COLA), scheduled to take effect in January, will result in an average monthly increase of more than $50 for beneficiaries. The AARP estimates this increase at $59 per month, emphasizing the financial relief this adjustment brings to recipients.
“This will help millions of people keep up with expenses,” commented Kilolo Kijakazi, Social Security’s acting commissioner.
Approximately 71 million individuals, including retirees, disabled individuals, and children, rely on Social Security benefits to support their livelihoods.
This year’s 8.7% increase was a response to a 40-year-high inflation rate, driving up the costs of consumer goods. With inflation showing signs of easing, the next annual increase is notably more modest.
Despite the reduction, senior advocates have welcomed the adjustment. AARP CEO Jo Ann Jenkins said, “Retirees can rest a little easier at night knowing they will soon receive an increase in their Social Security checks to help them keep up with rising prices. We know older Americans are still feeling the sting when they buy groceries and gas, making every dollar important.”
Social Security is funded by payroll taxes collected from workers and their employers. In 2024, the maximum earnings subject to Social Security payroll taxes will be $168,600, up from $160,200 in 2023.
Nancy Altman, president of Social Security Works, has urged Congress to pass legislation to protect and expand benefits. However, the program is facing a severe financial shortfall in the coming years.
According to the annual Social Security and Medicare trustees report released in March, the program’s trust fund is projected to be unable to pay full benefits beginning in 2033. If the trust fund is depleted, the government will only be able to pay 77% of scheduled benefits.
Although there have been legislative proposals to shore up Social Security, none have advanced beyond committee hearings.
A March poll by The Associated Press-NORC Center for Public Affairs Research found that most U.S. adults are opposed to proposals that would cut into Medicare or Social Security benefits, with 79% of respondents expressing their disapproval of reducing the size of Social Security benefits.
The COLA is currently calculated according to the Bureau of Labor Statistics’ Consumer Price Index (CPI). However, there are calls to use a different index, the CPI-E, which measures price changes based on the spending patterns of the elderly, including healthcare, food, and medicine costs. Any change to the calculation method would require congressional approval, and given the decades of inaction on Social Security, it remains uncertain if such a change will be approved in the near future.
For individuals like 83-year-old Louisiana resident Alfred Mason, any increase is welcomed, as it provides much-needed financial support during a period of persistent inflation. Mason expressed his gratitude, stating that “anything added to his income would be greatly appreciated.”
Source: AP
