Projected Increase Based on Higher Consumer-Price Data
The Social Security Administration is projecting a 3.2% increase in Social Security benefits for 2024, slightly higher than previous estimates. This adjustment is based on the latest inflation data, particularly the increase in consumer prices through August. According to the Bureau of Labor Statistics, consumer prices rose by 3.7% year-over-year in August.
Factors Driving the Increase
Gas prices played a significant role in fueling the rise, impacting the overall calculation of the cost-of-living adjustment (COLA). The COLA is determined using a specific subset of the consumer-price index known as the consumer-price index for Urban Wage Earners and Clerical Workers (CPI-W), which has seen a 3.4% increase over the past 12 months.
Announcement of Actual COLA
The Social Security Administration is expected to announce the final COLA figure in mid-October. This announcement will consider changes in the average consumer-price index from the third quarter of 2023 compared to the average data from the same period last year.
Impact on Monthly Benefits
If the projected COLA of 3.2% holds true, it would increase the average monthly retiree benefit of $1,790 by $57.30. This projection comes from Mary Johnson, a Social Security and Medicare policy analyst at The Senior Citizens League.
A Comparatively Positive Outlook
While a 3.2% increase may not match this year’s historical raise of 8.7%, it still exceeds the average over the past 20 years, which stands at 2.6%. According to Johnson, last year’s surge in prices for essential goods had a significant impact on seniors’ finances. Although inflation has moderated since then, many seniors are still trying to recover financially. Johnson emphasizes that this increase does not make anyone “rich.”
Considerations for Social Security Recipients
It is important to note that the final monthly amount received by Social Security recipients will also depend on the announcement of the Part B premium for 2024, which is usually made later in the fall by Medicare. Typically, Social Security deducts Part B premiums from most benefit checks. The Senior Citizens League estimates that the standard Part B premium for 2024 could be around $179.80 per month, an increase from this year’s premium of $164.90.
In conclusion, the projected 3.2% increase in Social Security benefits for 2024 is a positive development for retirees. However, the exact amount individuals will receive each month will only become clear after the announcement of the Part B premium.