Americans who have a Social Security benefit can get a raise every new year. This increase is called a COLA and is always announced by the United States Government in mid-October. The COLA is calculated by looking at inflation in certain months of the year.
Although apparently an increase in the checks may be great news for retirees, some of them think that it will not be enough. Considering that inflation is increasing by leaps and bounds in recent years, the COLA announced may not cover the usual expenses.
In calculating the COLA, the United States Government does not take into account retirees and their benefits. It is true that Social Security beneficiaries see the increase in the Cost of Living Adjustment, but this increase is not calculated on the basis of retiree benefits.
This is the main reason why some retirees are concerned. And it is normal this concern, especially considering that in the current year the COLA was much higher and yet inflation has not gone down that much since then. So in 2024 we will have inflation more or less similar to 2023 and, at the same time, a much lower COLA.
When retirees worry about this sort of thing the Social Security Administration clearly has a problem. Even sending out new checks such as Supplemental Security Income payments or other helps such as SNAP Food Stamps will not help some beneficiaries cope with inflation.
WHY COLA 2024 MAY NOT BE ENOUGH FOR RETIREES?
If we want to understand this situation we have to take into account all aspects related to Social Security. In the case of the maximum check for this benefit we are looking at $4,555 per month in 2023. This will be a payment of $4,700 as of January 2024. In this case, having $4,700 per month makes a retiree’s life quite comfortable.
But not all retirees have access to such a large check. What’s more, the average benefit is $1,888 per month, which will also increase 3.2% through the COLA. This will bring the average check to just $1,948. Which even if it is close to $2,000, retirees with a lot of bills to pay could be in trouble.
Not only that, but from October through January 2024 inflation could increase. If it does increase, the COLA will clearly be insufficient. So the Social Security Administration will have a very serious problem with its beneficiaries. There is no doubt that retirees are concerned about having enough money to combat inflation and not lose purchasing power.
WHAT OTHER BENEFITS WILL INCREASE IN 2024?
It’s not just the Social Security retirement check that will increase in the coming year 2024. Likewise, all other Social Security payments will have the 2024 COLA added starting in January. If we have a Supplemental Security Income benefit, disability check or some other payment we will see the increase as well.
Along these lines, widow’s payments will also have the COLA increase. Likewise, any recipient with a spousal benefit will be able to see the 3.2% increase in their check. The important thing to keep in mind is that starting in January we will have a little extra money.
If possible, it is advisable to put that money towards something other than bills or spending it on unnecessary things. It is important to save for the next hard times that will come in the following years. If the COLA continues to increase so little and inflation continues to hit retirees, we will find that most of them will not have enough money for their usual expenses.