When the Social Security Administration announced in mid-October that the COLA in the United States would be 3.2%, not all retirees had a good reaction. Although 3.2% may not seem like a low figure, it is not the highest either. This is especially true when you consider that in 2023 the COLA was 8.7%.
Coming from a year with such a high COLA, Social Security beneficiaries don’t seem to be very happy about it. The COLA is down 5% from the previous year, but it still seems to be enough to combat inflation. At the end of the day, that is the ultimate goal of this increase and no other.
With this in mind we can see if the COLA will really be enough to combat inflation in 2024. And the fact is that all prices have increased and in the end every retiree will have to pay more not only for their usual expenses, but for medical expenses such as Medicare, for example.
Each of these increases causes seniors to lose purchasing power. And as this happens every year, over time retirees have less money available to spend on things, as they need to put it toward Medicare and other expenses. That’s why it’s so important for the COLA to increase Social Security a little more each year.
WHY ARE RETIREES UNHAPPY WITH THE SOCIAL SECURITY COLA?
The new COLA will increase Social Security benefits by a maximum of $170. This seems like enough, but when you take into account the increase in all prices this may not be the case. Retirees will pay more for Medicare, spending as much as almost $60 more per person.
This will make the COLA increase seem insufficient, as it is not the only extra expense retirees will have. We must keep in mind that retirees also have to pay for their usual food, household and general bill expenses.
While it is true that if we take into account all the expenses that retirees have the COLA may seem insufficient, we must also keep in mind that the purpose of this annual increase is not to make retirees rich, but to cover inflation expenses.
Therefore, if a retiree spends the Social Security COLA increase on Medicare and other essential bills the purpose of this increase will be covered. In the event that some of that money the retiree is able to save some of it means that he or she did not need such a large COLA.
WHICH RETIREMENT CHECKS WILL INCREASE WITH THE 2023 COLA?
Any Social Security benefit will have an increase through the COLA. And best of all, every retiree can calculate what the check will be as of next year 2024 with a simple addition. In order to determine our benefit in 2024 all we have to do is add 3.2% to our current amount.
Thus, if our check is $1,000 per month next year we will have $1,032 every month. To each $1,000 we must add an extra $32. It is only necessary to add this 3.2% to each of the amounts sent by the Administration.
This will work for each and every Social Security check. So it doesn’t matter if your check is disability, age retirement or otherwise. Likewise, Supplemental Security Income checks will also have this increase in the coming year.