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Check If 2024 Social Security COLA Is Going To Benefit You

Social Security COLA
Social Security COLA; Source- AARP

The SSA declared in October that recipients would get a 3.2% increase in benefits for 2024. The increase for next year may seem insignificant in comparison to the 8.7% COLA that Social Security claimants began receiving at the beginning of 2023.

Social Security COLA

Social Security COLA;  Source- NPR

Social Security COLA 2024

However, the news becomes even worse. Your 2023 Social Security boost might not even help you at all, depending on how inflation plays out, whether or not you’re enrolled in Medicare. The Part B premiums for seniors who have registered in Medicare and Social Security at the same time are automatically subtracted from their benefits. The current regular monthly premium for Part B is $164.90. It will increase to $174.70 in 2024. For seniors on Social Security and Medicare, that alone implies that increased Part B expenses will rob them of about $10 of their monthly COLA.

Social Security Taxes

However, if you make more money than $174.70 a month, you can be charged extra. Furthermore, that surcharge may further reduce your COLA if that occurs. COLAs for Social Security are based on inflation. Benefit recipients’ raises in 2024 are significantly less than those in 2023 because inflation has been able to slow down over the previous 12 months. We are unsure, though, if inflation will resume its sharp rise in 2024. Should it occur and overall living expenses significantly increase, it might essentially make the COLA for the following year meaningless.

Recipients of Social Security COLAs have not always been able to keep up with inflation, and this year may be no different. If your recurring benefit is your only or only source of earnings, a COLA that isn’t able to keep up with inflation and increases in Medicare premiums could seriously damage your finances and compel you to make tough lifestyle choices. However, a poor COLA might not be as bad if you can enter retirement with a healthy amount of funds to augment your Social Security income.

No Increase In Social Security Benefits

Assume that, after accounting for Medicare and other considerations, your Social Security income will not increase significantly the next year. You might be able to make ends meet if you have a savings account that you can take out up to $500 a month. In summary, the COLA for 2024 is not the lowest that Social Security beneficiaries have ever received. In light of COLAs over the last 20 years, it is rather generous. However, counting too much on Social Security COLAs is not a wise decision. Therefore, if you haven’t retired yet, seize the chance to start saving so you won’t be too upset if COLAs in the future are even lower than expected.

 

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