The highly anticipated 2024 Social Security cost-of-living adjustment (COLA) announcement has finally come.
Per the Social Security Administration’s website, next year’s increase will be 3.2 percent. This is big news for seniors — but is it good news?
In some ways, yes. Social Security recipients deserve much more than what they’re getting now. But does this number really provide the value needed in the current economy?
Is the 2024 Social Security COLA a Significant Increase?
To answer the question of whether the current increase is significant or substantial in context, it’s important to define some terms.
First of all, this “increase” is not a raise in the traditional sense. It’s more of an adjustment. If anything, it’s bringing the number to where it should’ve been all along — or at least closer to this number.
A 3.2 percent increase will equate to an average of $50 extra for beneficiaries monthly. It’s always nice to have some extra funds. But for those who rely heavily on their benefits, is the number enough to make a difference?
For reference, the 2023 adjustment was 8.7 percent, the highest in 40 years. Even this failed to suffice in an inflationary economy. And despite reports of rates slowing, prices aren’t dropping. So will this upcoming increase really help retirees?
It all depends on a person’s lifestyle and expenses. It’s also worth mentioning those who have higher benefits (from earning more and/or claiming benefits later) may get more than $50 monthly.
What do you think of this number? Will it have a notable impact on your finances? Do you have plans for it? Share your thoughts with us.