All indications are that as of January 2024 United States Social Security benefits will increase by about 3%. This is the overall COLA forecast and barring a surprise this will be the figure we will see.
Thanks to the latest readings of the Department of Labor’s Consumer Price Index (CPI-W) we can see that this will indeed be the increase. Everything will depend on what the United States Government and the Social Security Administration decide, but this figure seems to be the correct one.
Although the variations in recent months in the CPI-W have not been too large, some of them have been large. For that reason, many Americans and the mainstream media have been talking about a much larger COLA, but in the end that will not be the case.
If we take into account the CPI-W reading by The Senior Citizens League, the COLA will increase by exactly 3.2%. Still, this is only a forecast, so we should not take this data as official.
WHEN WILL WE KNOW THE 2024 SOCIAL SECURITY COLA FIGURE?
The exact date for the 2024 COLA will be October 12. That is, the forecasts will cease to be forecasts in the next week, as we will have the exact dollar number that each of the benefits will increase.
Assuming the final COLA amount is 3.2%, the checks will increase enough to deal with inflation, but the increase will be much less than this year 2023. Recall that Social Security checks went up 8’7%, breaking records for decades.
Taking into account that benefits will be able to increase that amount, we will find ourselves with higher figures as of 2024. On the one hand, the average age of the retired beneficiary will be around $1899. This means that it will increase by about $60 per month.
TAXES AND COLA
Another thing to keep in mind will be taxes starting next year. If we start collecting a larger check we may find ourselves paying more taxes than in previous years. This may be because we reach a threshold that we did not reach before.
That is why it is advisable to contact an advisor if our Social Security benefit is very large. Having a retirement check will usually save us from paying taxes, but with the latest COLA increases, this could change.
Also, some Americans who collect Supplemental Security Income may also stop getting it if they collect a larger Social Security check. To make sure of all this, it is best to use Best Tool to see if you still qualify.