Social Security benefits will increase by 3.2% in 2024, the Social Security Administration announced Thursday morning.
That adds about $50 monthly to the average retirement benefit consumers will receive beginning in January. The annual increases are called cost of living adjustments, or COLAs.
The agency said people on Social Security will start getting the increased payments on Dec. 29.
"Social Security and SSI benefits will increase in 2024, and this will help millions of people keep up with expenses," said Kilolo Kijakazi, the acting commissioner of Social Security. SSI is Supplemental Security Income.
The cost of living adjustment is calculated based on an average of the inflation readings for the months of July, August and September. Specifically, it’s based on the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W, published by the Bureau of Labor Statistics.
The CPI-W rose 2.6% in July, 3.4% in August and 3.6% in September, according to the latest inflation data the bureau released Thursday.
"Retirees?can rest a little easier at night knowing?they?will?soon receive?an increase in their Social Security checks?to?help?them keep up with rising prices.?We know older Americans are still feeling the sting when they buy groceries and gas, making every dollar important," Jo Ann Jenkins, the CEO of AARP, the nonprofit organization formerly known as the American Association of Retired Persons, said in an emailed statement.
However, another advocacy group for older Americans, the Senior Citizens League, has argued that larger increases are required, especially for older retirees. It contends that the costs of the goods and services they need are growing much faster than Social Security benefits.
The group says people who retired before 2000 would need an additional $500 in benefits every month just to get back the purchasing power they had in 2000.
Almost 67 million people have been receiving Social Security benefits in 2023, according to the SSA. Most of them are retirees, as almost 90% of people over age 65 were getting those benefits as of June 30.
Inflation rocketed to 40-year highs last year in the wake of a combination of pandemic stimulus payments, an increase in shopping and spending, and widespread supply chain problems. That prompted the Federal Reserve?to raise interest rates at a rapid pace. The benchmark U.S. interest rate is the highest it has been in more than 20 years.
That has slowed the economy somewhat compared to last year, but inflation remains higher than it was throughout the 2010s.