How Much 2024 Payments Are Expected To Increase

The cost of living adjustment rose by 3.2 percent for 2024, the Social Security Administration announced today. This marks a major shift down from the current year’s increase of 8.7 percent.

In total, that will see seniors receive an extra $58 in monthly benefits on average, with the typical check amount at $1,885.

This shift could dramatically affect Social Security recipients as they rely on the payments for the majority of their living expenses.

The cost of living adjustment (COLA) is calculated based on September inflation numbers and affects the total amount that will be included in each Social Security check.

In years in which inflation is particularly high, beneficiaries receive a huge hike in their monthly benefits, but in recent years, the COLA has left many seniors unimpressed.

Because inflation is slowing down, Social Security recipients saw a lower COLA this year. In 2023, the COLA reflected a four-decade high of 8.7 percent. Over the past 20 years, the average COLA has been set at 2.6 percent.

Poverty High Among Seniors

While the COLA for next year’s Social Security benefits is an increase, many seniors are likely to still live in poverty despite the consistent checks.

“The harsh reality is that the amount that the COLAs increase benefits in most years is meager at best,” Mary Johnson, Social Security and Medicare policy analyst at The Senior Citizens League, told USA Today.

Historically, the Social Security Administration makes adjustments to benefits so that seniors will still have a solid amount of purchasing power, even as inflation invariably increases.

Still, this hasn’t stopped seniors’ poverty rate from slowly inching up in recent years. From 2020 to 2022, the older adult poverty rate had climbed 14.1 percent, according to the Census Bureau.

This is in part because Social Security only represents around one-third of a middle earner’s average wages, according to an Actuarial Note from the Social Security Office of Chief Actuary.

“Inflation was so severe in 2021 and 2022 that the average Social Security benefit fell behind by $1,054, leaving 53 percent of retirees doubting they will recover because household costs rose more than the dollar amount of their COLAs,” Johnson said.

The high poverty rate has severe consequences for many seniors.

Nearly 80 percent of seniors in a Senior Citizens League survey of 1,759 retirees said their essential items were more expensive than last year. This reality has led two out of three to postpone dental care, while one-third have been avoiding medical care due to the costliness.

Around 70 million Americans are impacted by the COLA due to their Social Security benefits. And of those, roughly 12 percent of men and 15 percent of women aged 65 or older rely on Social Security for 90 percent or more of their income.

The new COLA of 3.2 percent officially goes into effect in January.