The Social Security Administration released its projected COLA for 2024 last week, which came as no surprise at 3.2%. The Social Security Administration (SSA) said in a news statement that around 7.5 million users of Supplemental Security Income (SSI) will get higher payments in late December and that over 66 million retired retirees will experience the 3.2% COLA starting in January 2024.
Social Security COLA; Source- Forbes
Primary Insurance Amount
The rationale is that the COLA is applied to your primary insurance amount (PIA), which is different from your current benefit, depending on the circumstances. The benefit you would receive if you choose to start receiving pensions at your full retirement age is known as the Principal Inuity (PIA), according to the SSA. The advantage is neither enhanced for a delayed retirement at this age nor is it decreased for an early retirement. The PIA formula is somewhat intricate in and of itself. It is computed as the total of three different percentages of the average monthly earnings that are indexed. The amounts are determined by the recipient’s year of age 62, year of disability before age 62, or year of death before age 62.
Evaluation Of Social Security COLA
When calculating your COLA, the age at which you begin receiving Social Security retirement benefits is a significant factor. Not everyone waits to begin saving until they reach full retirement age, which is presently 66 or 67, based on when they were born. Your PIA and monthly payment may remain the same if you wait until your FRA claims your benefits. The Social Security Administration (SSA) does a recalculation to modify the percentage of income (PIA) for individuals who file for benefits at a later age. Benefit claimants who apply before their full retirement age (FRA) usually receive fewer amounts; those who apply after age 70 receive the largest potential award.
Medicare Part B Premiums
Your COLA may also be impacted by Medicare Part B premiums. Lower premiums may result in a bigger COLA for you. Your COLA may decrease if premiums rise, which is what will occur in 2024. The usual monthly premium for Medicare Part B will increase from $164.90 this year to $174.70 in 2024, according to a statement released by the Centers for Medicare and Medicaid Services last week. However, it is not the sole means your COLA could be impacted. According to the government News Network, certain adjustments are also given to different government employees. The Federal Employee Retirement System (FERS) will get a lower amount of the 2024 COLA than the Civil Service Retirement System (CSRS).
FERS Retirees
FERS retirees will receive 1% less than the full 2024 COLA when the CSRS COLA increases by more than 3%, which it will in 2024. Accordingly, the COLA for FERS pensioners will be 2.2% in 2019. Federal unions and organizations, who support providing FERS retirees with the entire COLA, find this disparity offensive. The SSA should reconsider how it calculates the yearly cost-of-living adjustment, according to several senior advocate organizations. Based on the percentage growth in the third quarter of the CPI-W, the COLA is calculated. However, other experts argue that the CPI-W underrepresents items that are important to elders, such as healthcare.
