Summary: The annual Social Security cost-of-living adjustment helps seniors stay on track with their finances amid inflation. Learn more about the 2024 cost-of-living adjustment. Estimated Read Time: 4 min
Table of Contents:
- What is the 2024 Social Security Cost of Living Adjustment?
- How Are Seniors Impacted by Inflation?
- Are Medicare Costs Determined by the Cost of Living Adjustment?
- Receive Help with Medicare Costs for 2024
Social Security income benefits are evaluated on an annual basis to ensure those who paid into the program receive a livable wage each month once they retire. This evaluation is known as the cost-of-living adjustment (COLA). The cost-of-living adjustment is based on several factors with the most influential being the rate of inflation. 2023 saw a historic high in the cost-of-living adjustment with a nearly 9% increase year-over-year. Providing on average, an additional $100 per social security check each month. This is due to the historic high inflation rate the U.S. experienced as the country began to resume daily life post COVID-19.
As expected, the 2024 Social Security cost-of-living adjustment is not quite as high as the previous year due to a lower rate of inflation. However, Social Security income recipients will still see an increase in their monthly benefits.
Retirees receiving Social Security benefits in 2024 will see an increase of 3.2% on top of what they received each month in 2023. This increase will take effect in January 2024 and will continue throughout the year.
On average, the 71 million Social Security recipients throughout the U.S. will receive an additional $50 added to their monthly income. This means the average Social Security benefit will increase from $1,848 per month to $1,907 per beneficiary in 2024.
While this may not seem like much to some, an additional $50 per month could mean the difference between receiving a hot meal, lifesaving medications, or even being able to have extra gas money to travel or visit with family members.
According to the Social Security administration, cost-of-living notices will be sent to all Social Security recipients throughout the month of December. This notice will outline your specific Social Security benefit amount, which can vary from the average benefit noted above.
However, if you wish to obtain this information sooner, you may be able to do so through your online mySocialSecurity account.
It is no secret that many seniors are struggling to get by as prices continue to rise. And while inflation rates seem to be going down, costs of everyday essentials continue to be at a seemingly all-time high. As a retiree on a fixed income, inflation is an issue that can become extremely problematic. Thus, making every dollar count is essential.
Inflation impacts retirees in more ways than one. Nearly 60% of retirees state that their retirement savings have drastically decreased over the last 12 months and are worried that the increased cost-of-living may force them to empty their accounts faster than expected.
As the cost of rent, gas, groceries, and daily living go up, this increase in Social Security benefits should help retirees sleep a little better at night knowing extra income is on its way.
Medicare costs are not reliant on the cost-of-living adjustment. However, there could be a correlation between inflation and the cost of Medicare premiums. Additionally, your Social Security benefits check may be reliant on the cost of Medicare. This is due to the Medicare Part B premium.
To calculate your actual Social Security take-home amount, it is important to consider the Medicare Part B premium which may be deducted from your benefit check. Additionally, if you are enrolled in a Medicare Advantage or Part D plan, these premiums may also be deducted from your Social Security income.
Remember, Medicare Supplement (Medigap) premiums cannot be deducted from your Social Security checks. So, you’ll need to factor in that cost to your monthly expenses if you are enrolled in a Medigap plan.
Understanding your Medicare costs is essential for budgeting your Social Security income benefits. The best time to determine your Medicare budget for the upcoming year is during the Medicare Annual Enrollment Period. During this time, you can reevaluate your coverage and make changes that work with your income and budget. To speak with a licensed agent who can help you determine a suitable plan for you, call us at the number above or complete our online rate form. As always, our services are 100% free and there is no obligation.