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As we inch closer to the new year of 2024, millions of Americans who rely on Social Security await news about the annual Cost of Living Adjustment (COLA). This adjustment is a vital aspect of the Social Security program, designed to help beneficiaries keep pace with rising living costs.
The 2024 COLA: A Quick Overview
The Social Security COLA is calculated based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). It is an important mechanism to ensure that Social Security benefits maintain their real value in the face of inflation. The COLA is typically announced in October each year, with adjustments taking effect in January of the following year.
This year, the Social Security Administration has determined there to be a 3.2% Cost of Living Adjustment beginning in 2024.
Although a COLA means recipient’s monthly payments will increase, it also means the cost of living has also increased. This means prices for goods and services have increased enough to affect the cost of living.
What This Means for Beneficiaries
The COLA has a direct impact on the financial well-being of millions of Social Security beneficiaries, including retirees, disabled individuals and survivors.
The 3.2% increase will raise benefits payable to more than sixty-six million Social Security beneficiaries in January 2024. More than 7.5 million SSI beneficiaries will begin receiving increased payments on December 29, 2023.
For individuals who are applying for SSD or SSI, there are important changes to SGA in 2024 as well. If you plan to work while applying for or receiving these benefits you may come across the word Substantial Gainful Activity (SGA). When someone is working as an employee, Social Security sets a limit on how much you can earn. In 2024, the monthly gross amount an individual can make is $1,550.00.
Planning for the Future
The COLA serves as a crucial reminder for individuals to plan their financial future carefully. As inflation erodes the purchasing power of fixed-income sources, it becomes essential for retirees to consider other income streams and savings. Financial planning, investing wisely and managing one’s expenses can help offset the impact of inflation on retirement savings and Social Security benefits.
Recipients of these benefits will be notified in December 2023 of the changes to their benefits. You can find this information in the message center of your My Social Security Account. Letters will also be sent.
If you have applied for SSD or SSI benefits or are considering applying and have questions, contact the attorneys at Berger and Green today at 412-661-1400 for a free no obligation consultation. We can help you at any stage of the disability process.
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