CHICAGO (NewsNation) — Social Security’s cost-of-living adjustment or COLA, is projected to adjust for inflation for more than 74 million Americans in 2024.
It’s the silver lining many seniors were hoping for: increased monthly Social Security payments covering essential needs like prescription drugs, food, housing, and dental services.
COLA, a vital component of Social Security, is calculated yearly to assist in keeping up with inflation.
In 2023, the cost of living adjustment was nearly 9% — the most in four decades.
While next year’s 3% raise may seem small, it’s still higher than the average 2.6% increase over the past 20 years. With prices expected to cool down, expenses like grocery bills won’t eat up as much of retirees’ Social Security checks.
According to the Social Security Administration, a 3% cost of living adjustment in 2024 means:
- The average retired worker could receive an extra $55.12 in monthly benefits.
- Spouses could receive an additional $26.79 per month.
- Survivors could receive $43.56 per month.
- Disabled corkers would receive an additional $44.59 per month.
However, experts caution these numbers could change. Beneficiaries won’t know exactly how much extra money they’ll receive until additional data comes out. For example, a hike in Medicare premiums could take a bite out of Social Security benefits. Another factor that could impact payments is the costly Alzheimer’s drugs covered by Medicare.
The future of Social Security remains uncertain and that could have a major impact on retirement plans, as funds are expected to be depleted by 2035, according to the Board of Trustees.
Social Security would only be able to pay out 80% of benefits if the government doesn’t seek alternatives to address the shortfall.