Annual COLA Adjustment: Protecting Social Security Benefits Amid Inflation

The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which measures current inflation rates, is the primary source of data used to calculate the yearly COLA increase.

The Social Security Administration bases the COLA increase on the percentage change in CPI-W from the third quarter of last year to the third quarter of the present year. In essence, it aims to maintain the Social Security benefits’ purchasing power in the face of rising costs.

Preliminary estimates point to a 3% hike, while the precise amount for the 2024 COLA won’t be made public until October 12th, depending on the publication of the third-quarter inflation figures for 2023.

Effect on Those Receiving Benefits

Let’s now examine how this anticipated 3% COLA rise would actually affect different beneficiary categories.

Retirees: An anticipated monthly rise of $55 will result in an average benefit of $1,882 in 2024.

Workers with disabilities: A $44 monthly increase is anticipated, translating to an average benefit of $1,527 in 2024.

Senior Couples (both receiving benefits): An increase of $89 per month is anticipated, with a maximum payment of $3,061 on average in 2024.

Widows/Widowers: A hypothetical $51 increase each month would result in a $1,755 benefit on average in 2024.

Widows/Widowers with Two Children: Envisaged rise of $106 per month would result in a $3,626 average benefit in 2024.

Timeline for Implementation

annual-cola-adjustment-protecting-social-security-benefits-amid-inflation — The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which measures current inflation rates, is the primary source of data used to calculate the yearly COLA increase.

It is important to note that the COLA rise will begin to take effect in January 2024 as beneficiaries eagerly await the boost in their Social Security income. The beneficiary’s birthdate and the start date of their Social Security payments determine the precise payout date:

Payments will be made on the second Wednesday of January 2024 for people born between the first and tenth of the month.

Payments are scheduled to be made on the third Wednesday of January for people whose birthdays fall between the 11th and the 20th of the month.

Beneficiaries who were born between January 21 and January 31 can anticipate receiving their payments on January’s fourth Wednesday.

With the exception of weekends and holidays, recipients of Supplemental Security Income (SSI) normally obtain their payments on the first of each month. The enhanced payments will start for anyone who started receiving Social Security benefits before May 1997 on January 3, 2024.

80% of Seniors Who are Affected by the COLA’s 3% Increase are Unable to Buy Basic Necessities

One obvious problem has surfaced as a cause of worry in the complex web of economic issues that seniors must navigate: the increased financial pressure brought on by the rising prices of basic home necessities.

Recent findings present a stark picture of the struggles faced by a sizable segment of our aging population, showing that a startling 80% of seniors find themselves in the unfortunate position of having to pay more for these essential things.

As we negotiate the intricate web of economic circumstances, the upcoming 2024 COLA rise will serve as a monument to lawmakers’ unwavering dedication to preserving the financial security of Social Security recipients.

While the precise numbers won’t be known for some time, it is encouraging to see the steps being taken to protect the price-less lifelines of our elderly and disabled citizens from the inflationary wave.

Source: Marca