Each year’s COLA causes United States Social Security benefits to increase a little or a lot, depending on the year. As this figure increases in line with inflation, each year it goes up by a totally different figure. It is not possible to determine exactly what the COLA increase will be within each year.
Since inflation is so much to blame for the increase in Social Security checks, when it stagnates everything can come to a standstill. While stagnant inflation can be good news, for some retirees it can be the opposite. The way the United States Government and Social Security calculate the COLA means that in the end it may not be enough.
This year, 2023, we have seen an 8.7% increase. This is a record high compared to previous years, and we have not seen such a high increase in Social Security benefits in ten years. Although prices have continued to rise since then, Social Security checks will not reach such a high increase in the coming year.
This is mostly because at the key time inflation will be calm and leisurely, even though it has increased so steeply up to that point. Therefore, we can be assured that the increase will not be as much of an increase due to stagnant inflation.
Increasing Social Security through the COLA in 2024
It is still too early to determine what the 2024 COLA will be, but all experts, including the Senior Citizens League, are pointing to an increase of no more than 3%. This would be great news in normal situations, but this is not a very normal situation.
Price increases in general have been going up. We have seen that in the past everything related to expenses for Americans has increased a lot. And this is bad news for any retiree with a Social Security benefit as the only source of income.
Thus, it is safe to say that we are not looking at a fair increase for many of these citizens. And this is mostly due to the way the government calculates the increase in retirement checks and other SSA payments.
How is the COLA calculated every year?
The COLA is calculated based on inflation in certain months of the year. To be exact, the United States Government and the Social Security Administration increases benefits depending on how prices increase in the months of July, August and September.
This could be good news, but nothing could be further from the truth. If in this year 2023 prices have increased the most during the months of January and February, in the end this will not be reflected in the COLA. Therefore, the increase will not be enough to be able to pay for all the expenses as it should.
The announcement of the final COLA increase is made every year in October. By the middle of this month we will be able to find out what the final percentage increase will be for all Social Security payments in 2024.