Collect Social Security? Your benefits are going up in 2024
Social Security recipients should see another uptick in their benefits in 2024, though it won’t match the steep increase they saw in 2023.
Americans who receive Social Security benefits are due for an increase in their monthly payout, when the next annual cost-of-living adjustment (COLA) goes through.
Every year since 1975, the Social Security Administration (SSA) has adjusted monthly payouts to social security recipients to ensure their benefits keep up with inflation and other cost-of-living increases.
As the U.S. gets a handle on the record-breaking inflation of 2021 and 2022, seniors can expect a slightly lower COLA in 2023, according to data released by the Senior Citizens League, a senior advocacy organization.
But there will still be an increase. Here’s what you need to know about your social security benefits as we close out 2023.
How much will my Social Security be in 2024?
The Senior Citizens League estimates that the increase, which will be announced in mid-October and enacted in January 2024, will be 3.2%.
The SSA bases the COLA on data from the Consumer Price Index for Urban Wage Earners and Clerical Workers (COI-W), a monthly index of price changes for low- and middle-income earners in the U.S., essentially a measure of inflation.
The most recent CPI-W indicated that prices had continued to climb since this time last year, but more slowly than in 2023.
A year-over-year analysis shows that the CPI-W in August 2023 was 3.4% higher than in August 2022, which means as long as the CPI for September doesn’t show much fluctuation, the upcoming COLA should be slightly higher than the 3% range.
The average monthly Social Security payout is $1,705.79, so an increase of 3.2% per month would provide a total monthly payment of $1760.37, an increase of $54.58 monthly.
Here’s how it could break down by retiree:
| Social Security recipient type | Average 2023 Social Security check | Average estimated 2024 Social Security check | Expected increase from 2023 to 2024 |
| Single retiree | $1,840.27 | $1,899.16 | $58.89 |
| Retired couple* | $3,680.54 | $3,798.32 | $117.78 |
| Worker with disability | $1,486.83 | $1,534.41 | $47.58 |
| Widow | $1,715.77 | $1,770.67 | $54.90 |
| Children of deceased workers | $1,067.20 | $1,101.35 | $34.15 |
Why is the increase lower than in 2023?
Because of that record-high inflation, the adjustment for 2023—8.7%—was the highest it’s been since 1981 when the U.S. was still reeling from a devastating recession.
In 2022, when inflation began ticking up, the COLA was 5.9%, still high based on previous years, which fell within the 1-3% range.
The Federal Reserve is tasked with keeping inflation near 2%. When inflation surpassed this number, the Fed raised the federal funds rate—the rate banks charge when borrowing from one another—to combat rampant inflation.
When this happens, consumer interest rates go up, savings rates generally also rise, and COLA increases tend to be higher.
When will the Social Security increase happen?
The annual COLA is based on data from July, August, and September CPI figures.
Once the September report is released on October 12, the SSA will take the inflation average for these three months and compare it to the same average from the previous year.
The difference in inflation will determine the official amount of the cost of living adjustment for the following year.
In years where the difference is negative, when consumer prices have dropped compared to the year before, COLA doesn’t decrease but rather stays flat.
The newest COLA announcement should come sometime in mid-October, and Social Security payments will change starting in January 2024.
Does COLA keep pace with inflation?
Although COLA increases are based on inflation and designed to help recipients meet rising costs of living, they do not always keep pace with yearly inflation levels.
Since the adjustments are based on data from the previous year, if inflation spikes, the COLA may not meet the demand until the following year when it is adjusted again.
In 2022, the U.S. saw inflation skyrocket due to Covid and global supply chain issues. Inflation reached an average of 8%—a 3.3% increase from 2021.
However, since the COLA instituted at the beginning of 2022 was based on CPI data from 2021 and 2020, inflation outpaced the COLA that year, and the 5.9% increase was not enough to offset rising consumer prices.
In 2023, though, when inflation began to slow down, Social Security benefits had been adjusted to meet demand set in 2022, leaving recipients with a little more purchasing power than they’d had in 2022.
It was still not enough to keep up with the rise in prices, though.