Each month, the Social Security Administration (SSA) sends different benefits, including those for retired workers and survivors (children, spouses, widows, widowers or parents of a deceased beneficiary).
It also sends disability payments, including Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI).
These benefits increase each year thanks to the cost of living adjustment (COLA), which is calculated and applied to payments so as not to affect the purchasing power of beneficiaries.
READ ALSO: Social Security: Who got $1800 on Sept. 1?
How is COLA calculated?
The COLA is linked to the annual increase in the Consumer Price Index for Urban Wage Workers and White-collar Workers (CPI-W).
The COLA calculation begins from the third quarter of the previous year to the third quarter of the current year; that is, based on the CPI-W data for July, August and September of both years.
For example, the difference between the CPI-W of 2021 and 2022 was 8.7%, so Social Security payments increased by this percentage for 2023. As for 2024, there are only predictions of how much the COLA could be. However, the official announcement of the exact percentage has not yet been published.
When will the increase in Social Security benefits be officially announced?
The COLA is announced once the CPI-W data, corresponding to July, August and September, are available for calculation. The official COLA for 2024 will be announced in October this year.
Taking last year’s announcement as a reference, the cost-of-living adjustment for next year could be announced on October 12, the day the Bureau of Labor Statistics publishes the Consumer Price Index report.
The COLA would go into effect in December and would be applied for the first time in Social Security and SSI payments in January 2024.
Social Security COLA 2024: predictions
According to the most recent estimate from The Senior Citizens League, one of the nation’s largest nonpartisan senior groups, Social Security’s cost-of-living adjustment for 2024 could be 3%. This estimate is based on data from the consumer price index for the month of July.