Recent estimates say that next year’s Social Security checks could be the biggest ever. However, this may not be what all receivers are hoping for. The Bureau of Labor Statistics releases the cost of living adjustment (COLA) percentage every year.
This number tells us how much our Social Security checks will grow next year. A lot of people depend on this boost to keep up with inflation, but it doesn’t seem to be enough for some retirees, who have expressed worry about it. Other experts say this could be one of the best raises in the last few years, even though the Senior Citizens League didn’t think it would happen.
The historic increase in Social Security checks will be released in October
As the week starts, Wall Street is focusing on numbers about the economy. Traders are waiting to see if the numbers for consumer and producer prices will cause the Federal Reserve to lower interest rates by a quarter of a percentage point or by half in September.
The state of consumers and the business as a whole will also be greatly affected by July’s sales. Experts think that Social Security retirees could get raises of between 2.7% and 3.2%, based on what they think inflation will be in 2024. The government won’t share official numbers until October.
For this much of a rise, there would have to be four years in a row of increases of at least 2.7%, which hasn’t happened in 32 years. The Senior Citizens League says that any increase will likely be balanced out by the fact that food prices are already higher than they were before 2020.
Things like lettuce, sugar, and eggs all cost eighty percent more. Sugar costs forty-five percent more, and eggs cost eighty percent more. The group says that these price hikes have made it harder for retirees to get enough food. One-third of retirees who were surveyed had either asked for food stamps or gone to a food pantry in the past year.
Why is the cost of living adjustment (COLA) essential for Social Security?
The Social Security Cost of Living Adjustment (COLA) is an important part of the Social Security system that keeps the spending power of Social Security and Supplemental Security Income benefits stable. This keeps beneficiaries safe from inflation. Also, COLAs let people who haven’t claimed Social Security benefits yet keep the buying power of their future payouts by changing the primary insurance amount (PIA), which is the base value used to figure out benefits at full retirement age. The PIA is changed every year if the CPI shows inflation. This makes sure that the amount a person claims is based on the value after inflation, not the value at the time the claim was made.
If you wait to collect Social Security until after your full retirement age, you will get more money because you will have delayed retirement credits (DRCs). In other words, the longer the delay, the bigger the effect on the total amount of the reward. If you know how COLAs affect payments, you can make a smart choice about whether to apply for Social Security. People who wait to file may benefit more from the combined effect of COLAs on rising PIAs, which means they will get bigger monthly payouts.
[Also See :- Three Social Security checks will be sent out for the rest of the month. These are new checks for seniors]
How much will Social Security checks increase depending on the COLA percentage increase?
The official percentage raise could be anywhere from 2.6% to 3.2%. All people who get retirement, survivor, disability, or SSI benefits will see changes to their Social Security checks. The real percentage increase won’t be known until October at the end of the year, but we can show you how much your payment checks will go up if the raise is either 2.6% or 3.2%, depending on the program.
| Retirement benefits | Social Security checks | 2.6% COLA increase | 3.2% COLA increase |
| On average | $1,900 | $1,949 | $1,961 |
| Age 62 | $2,710 | $2,780 | $2,797 |
| Age 67 | $3,822 | $3,921 | $3,944 |
| Age 70 | $4,873 | $5,000 | $5,029 |
| Survivor benefits | Social Security checks | 2.6% COLA increase | 3.2% COLA increase |
| On average | $1,505 | $1,544 | $1,553 |
| Individual | $1,773 | $1,819 | $1,830 |
| 2 Children | $3,653 | $3,748 | $3,770 |
| Disability benefits | Social Security checks | 2.6% COLA increase | 3.2% COLA increase |
| On average | $1,537 | $1,577 | $1,586 |
| Blind recipients | $2,590 | $2,657 | $2,673 |
| Maximum payment | $3,822 | $3,921 | $3,944 |
| SSI benefits | Social Security checks | 2.6% COLA increase | 3.2% COLA increase |
| On average | $698 | $716 | $720 |
| Individuals | $943 | $968 | $973 |
| Couples | $1,415 | $1,452 | $1,460 |
| Essential person | $472 | $484 | $487 |