At the beginning of 2023, Social Security beneficiaries witnessed a substantial 8.7% increase in their benefits. This cost-of-living adjustment (COLA) was the most significant in several years, driven by the intense inflation experienced in 2022.
Now, beneficiaries are keen to discover the COLA for 2024. Their wait will soon be over. The BLS (Bureau of Labor Statistics) will release its September Consumer Price Index (CPI) on October 12. The CPI report includes data from the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which is a specific segment of the CPI.
Following this data release, the Social Security Administration (SSA) will determine the COLA for 2024. They usually announce this promptly, so by October 12, beneficiaries should be updated. It remains to be seen how satisfied retirees will be with the 2024 COLA.
Anticipated Lower Increase
It’s essential to note that the COLA for 2024 is unlikely to match the significant increase seen at 2023’s onset. According to current projections, the Cost of Living Adjustment (COLA) for 2024 is expected to be between 3% and 3.5%. While this might seem modest compared to the recent 8.7% hike, it’s not particularly low when viewed historically. It’s crucial to understand that COLAs are tied to inflation. Thus, a smaller increase suggests a reduction in living expenses, which can be comforting for those primarily reliant on Social Security for their retirement funds.
Medicare Part B: A Potential Variable
Regardless of the final 2024 Social Security COLA, beneficiaries should be conscious of potential Medicare Part B premium increases, which could offset their COLA gains. Those enrolled in both Medicare and Social Security have their Part B premiums automatically deducted from their benefits. If Part B becomes significantly pricier, the net gain from the 2024 COLA might be reduced.
In 2023, Medicare Part B costs decreased. However, this trend isn’t anticipated for 2024. Earlier projections this year indicated a potential rise in Medicare Part B monthly premiums from $164.90 to $174.80 in 2024. Therefore, beneficiaries should not only await the SSA’s announcement regarding the 2024 COLA but also updates on Medicare premium expenses.
In conclusion, October 12 is set to be a pivotal day for Social Security recipients. Alongside the 2024 COLA announcement, the SSA will release additional details about the program, including updates on the wage cap and the earnings test limit for beneficiaries who both work and receive benefits. Beneficiaries need to be aware of the information that becomes available on this day.