Social Security COLA Increase for 2024: The Final Estimate Before October
The latest and final estimate for the 2024 Social Security COLA increase is 3.2%, up slightly from the August estimate of 3.0%. As we inch closer to the official announcement in October, it seems more certain that the 2024 increase will be significantly lower than it was for 2023.
We still have to wait for the rest of the Consumer Price Index data to pour in, but Americans can take comfort in the fact that this estimate is higher than The Senior Citizens League’s original forecast of 2.7% in June. Still, a $57.30 average monthly increase is well short of the $146 per month average increase beneficiaries saw after the 8.7% COLA this year.
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2024 Social Security COLA Increase
So, how much will the 2024 Social Security cost-of-living adjustment (COLA) be? TSCL estimates a 3.2% Social Security COLA increase in 2024, based on the latest Consumer Price Index data. In addition, the Committee for a Responsible Federal Budget has announced its own COLA 2024 estimate: between 2.6% and 3.3%.
This small spike is a surprise for many seniors, even though inflation has been trending downward. Usually, as inflation falls, so does the promise of a large cost-of-living adjustment for Social Security benefits. But even with a small bump, it’s rare that seniors find the cost-of-living adjustments match up with the cost increases they personally see just about everywhere else. In fact, Retirement Living found that 22% of baby boomers plan on delaying their retirement due to an impending recession.
Keep in mind: We still have a few weeks before the Social Security Administration (SSA) officially announces cost-of-living increases for 2024. In October, the SSA will calculate third-quarter inflation by averaging July, August, and September Consumer Price Index data, then compare it to the third-quarter average from 2022. The SSA will then officially set the COLA for the next year (2024) by calculating the difference between those two numbers.
In August 2023, the average monthly check for Social Security beneficiaries was just over $1,705, according to the SSA. A 3.2% adjustment would increase that to roughly $1,762. That’s an extra $57 a month.
That doesn’t necessarily mean seniors would get that extra $62 come January, however. Most Social Security beneficiaries have Medicare Part B premiums deducted from their benefits. Right now, the Medicare Trustees Report predicts a roughly $10 increase in monthly premiums for Medicare Part B in 2024, which would reduce how much seniors actually get in their monthly benefit payout.
Read More: How Much Social Security Will I Get?
Annual Social Security Cost-of-Living Adjustments
A 3% Social Security COLA would be welcome, no doubt, but it pales in comparison to the adjustments seniors have become accustomed to in recent years. Because inflation has been steadily rising until recently, the SSA has made large cost-of-living adjustments so far this decade.
For instance, the 2023 Social Security COLA was 8.7%—the largest in four decades. (The largest cost-of-living adjustment ever was in 1981, when Social Security benefits increased by 14.3%). But given that some seniors were retired in 2010, 2011, and 2016—when there was famously no cost-of-living adjustment for Social Security benefits—a 3% increase is nothing to sneeze at.
The table below explores cost of living increases by year over the last five years.
Source: Social Security Administration
What Is the Maximum Social Security Benefit For 2023?
The 2023 Social Security COLA of 8.7% was the largest in decades. In 2023, individuals at full retirement age received the maximum Social Security retirement benefit of $3,627 a month ($43,524 a year). Individuals who file for Social Security at 62 in 2023 would be eligible for a max benefit of $2,572 a month ($30,864), while individuals who retire at age 70 in 2023 would earn a max benefit of $4,555 a month ($54,660 a year).
|Files at…||Max Monthly Benefit||Max Annual Benefit|
|Full retirement age in 2023||$3,627||$43,524|
|62 in 2023||$2,572||$30,864|
|70 in 2023||$4,555||$54,660|
Source: Social Security Administration
For most, Social Security benefits are not enough and should be part of a larger retirement plan. Use our retirement calculator to determine if you have enough money to retire without factoring in Social Security benefits.
Read More: How Much Do I Need to Retire?
How to Calculate Your Benefits Using the COLA Increase
To calculate your benefits using the estimated COLA increase for 2024, multiply your current benefit amount by 1.03. (As the estimated percentage changes, you can simply change the multiplier.)
For instance, if you earn the average Social Security benefit of $1,705, multiply it by 1.03 to determine your new benefit:
$1,701 x 1.03 = $1,756
As we mentioned, however, Medicare Part B premiums may go up, which can alter your calculation. In years with smaller Social Security COLAs, Part B contributions can completely eradicate any increase in monthly benefits.
“When we get a COLA increase, we usually see a bump up in Medicare premiums. It’s not always a wash, but it definitely erodes the power of the COLA benefit,” says Christopher Hensley, retirement planning professional and founder of Houston First Financial Group. “Some argue that the SSA should use a different Consumer Price Indicator, such as CPI-E, which considers common expenses for those aged 62 and up. It turns out, healthcare, housing, and prescription drugs weigh much heavier on the financial well-being of the aging retiree.”
Social Security Payments FAQs
What will the Social Security increase be in 2024?
The Social Security Administration has not yet officially calculated the benefit increase for 2024, but we can utilize estimates from groups like The Senior Citizens League to come up with a fair guess. Right now, based on the Consumer Price Index, the COLA amount for 2024 will likely be 3.2% and will kick in with January 2024 benefits. We will know the official answer in October 2023.
When is the Social Security COLA announced?
The 2024 Social Security COLA will be announced in October 2023. By October, the Social Security Administration can use Consumer Price Index data from July, August, and September 2023 to calculate the average cost-of-living increase and compare it to the same period in the previous year. The difference between the two numbers informs the Social Security COLA for the following year.
How do I find out how much Social Security I get a month?
You can create an account on my Social Security to receive your Social Security Statement. If you’re already receiving Social Security benefits, this statement will outline your current earnings. If you haven’t yet retired and filed for Social Security, you can use this account and statement to predict your future Social Security benefits. Each December, eligible individuals should receive notification of their new monthly benefit amount in their my Social Security account.
What is the historical average COLA increase?
From 1976 through 2023, the historical average COLA increase has been 3.79%. Beneficiaries got one of the largest increases in Social Security history in 2023 (8.7%), but even that historic increase pales in comparison to the largest ever: 14.3% in 1981. On the flip side, there have been three years where beneficiaries received no cost-of-living adjustments: 2010, 2011, and 2016.
Learn more: The Latest Social Security Statistics