Every year, Social Security adjusts benefit amounts to account for inflation through a cost-of-living adjustment (COLA).
Social Security provides people with an income when they retire or can’t work due to disability. Those who are retired can typically start receiving their Social Security benefits as early as age 62.
In 2023, Social Security and Supplemental Security Income (SSI) recipients saw an 8.7% increase to the benefits, the largest since 1981, due to the annual COLA.
Several VERIFY readers have asked whether the 2024 COLA will be as high as it was the year before.
THE QUESTION
Will Social Security’s 2024 cost-of-living adjustment (COLA) be as high as it was in 2023?
THE SOURCES
THE ANSWER
No, Social Security’s next cost-of-living adjustment will not be as high as it was in 2023.
WHAT WE FOUND
On Thursday, Oct. 12, the Social Security Administration (SSA) announced that Social Security recipients will receive a 3.2% increase in their benefits beginning in January 2024.
That means Social Security retirement benefits will increase by roughly $50 per month on average in 2024, SSA said.
This is significantly lower than the 8.7% increase that beneficiaries saw in 2023, which raised the average Social Security retirement benefit by about $146 per month.
The lower COLA for 2024 is because inflation skyrocketed in 2022 but has started to normalize again in 2023.
Social Security will begin mailing notices about recipients’ new benefit amounts in early December, SSA says. Those who want to know their benefit amount sooner can find their COLA notice online through their my Social Security account.
Social Security recipients will need to set up their accounts by Nov. 14, 2023, to get their COLA notice online, according to SSA.
How the COLA is calculated
The COLA is calculated based on the percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), an inflation gauge measured by the U.S. Bureau of Labor Statistics (BLS). It measures the average change over time in the prices that workers are paying in a “basket of consumer goods and services.”
SSA explains on its website that the COLA is equal to the percentage increase in the CPI-W from the third quarter average of the previous year to the same average from the current year. If there is an increase, it’s rounded to the nearest tenth of a percent. That same increase is applied to monthly Social Security payments.
To determine the 2024 COLA, SSA compared the CPI-W for July, August and September of 2022 to the same period in 2023.
The CPI-W increased 2.6% annually in July, 3.4% annually in August and 3.6% annually in September, BLS data show.
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