COLA Increase 2024: In 2023, retirees received an unprecedented cost-of-living adjustment (COLA) of 8.7 percent, signifying the largest increase in benefits for this group in over four decades.
This additional income was unquestionably a lifeline, and it has the potential to restore the beneficiaries’ purchasing power from the previous year. Nonetheless, there is a negative aspect to this positive development.
Due to the implementation of two significantly large COLAs in consecutive years, it is probable that Social Security recipients will receive a much smaller increase in benefits the following year.
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Reason of Smaller COLA Increase 2024
Positively, it is possible that Social Security’s cost-of-living adjustment will be somewhat higher than initially projected.
In 2024, the Senior Citizens League (TSCL), a non-profit organisation advocating for senior issues, projects a Social Security COLA of 2.7%. However, after the Bureau of Labour Statistics released June’s inflation data, TSCL revised its estimate to three percent.
If TSCL’s revised estimate is accurate, the average retired worker receiving Social Security benefits would receive $55 more per month.
Similarly, the typical worker with a disability and the average beneficiary of a survivor would see their monthly payments increase by nearly $45 and $44, respectively, over the next year.
However, this situation also has a disadvantage. Despite the possibility of a larger adjustment in 2024, a substantial portion of Medicare Part B recipients may not experience a net gain or may see no gain at all due to a substantial increase in Medicare Part B premiums.
Part B of Medicare encompasses outpatient care and is funded by monthly deductions from the majority of Social Security recipients.
Notable is the fact that Part B premiums decreased in 2023, only the second time in this century that this has occurred. Part B premiums tend to increase every year, however, due to the rising cost of brand-name medications.
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