STATEN ISLAND, N.Y. — With the highest inflation seen in years, many Americans on Social Security have had to rely on their annual cost-of-living adjustment (COLA).
Thanks to Social Security amendments that passed in 1972, COLA increases the amount Social Security recipients get each year, and is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), a federal measurement that estimates the cost of a basket of goods for the average wage earner.
It is calculated against a Social Security recipient’s primary insurance amount (PIA), which is determined by the year a worker attains age 62, becomes disabled before age 62, or dies before attaining age 62. A PIA is calculated using the wages a worker earned throughout his or her life.
Using the complex formulas, the Social Security Administration determined a COLA of 8.7% last year, one of the highest adjustments seen since the early 1980s.
While the adjustment applies to everyone receiving the benefit, the calculation will be the same, but lead to disparate amounts seen each month for different types of recipients.
For instance, some people choose to retire before they’re eligible for their full benefit, decreasing the monthly amount they receive, and inversely, some people choose to delay retirement increasing their monthly amounts.
Two 75-year-old persons, one who retired before 62 and one who retired later, would see different totals on their monthly checks despite being the same age and receiving the same COLA based on their PIA.
Similarly, people receiving a disability benefit or a survivor benefit have their PIA calculated differently, so their COLA will be applied differently.
For forthcoming COLAs, the Social Security Administration officially announces the annual COLA in October, meaning recipients need to wait a few more months before finding out exactly how much their benefits will increase.
However, The Senior Citizens League provides estimates throughout the year that give recipients an idea of how much their monthly payments may increase based on current inflation rates.
Using current inflation data from the Consumer Price Index, it’s estimated there will be a 3% COLA in 2024, according to The Senior Citizens League.
A 3% COLA would raise an average monthly benefit of $1,787.00 by a little more than $53.60, bringing the monthly benefits to roughly $1,840.60.
In recent years, the coronavirus (COVID-19) pandemic’s impact on inflation led to abnormally high adjustments, including a 5.9% increase in 2022 and an 8.7% increase in 2023.
In 2023, an average of nearly 67 million Americans per month collect Social Security benefits, totaling over $1 trillion dollars in benefits paid during the year, according to the Social Security Administration.
For forthcoming COLAs, the Social Security Administration officially announces the annual COLA in October, meaning recipients need to wait a few more months before finding out exactly how much their benefits will increase.
However, The Senior Citizens League provides estimates throughout the year that give recipients an idea of how much their monthly payments may increase based on current inflation rates.
Using current inflation data from the Consumer Price Index, it’s estimated there will be a 3% COLA in 2024, according to The Senior Citizens League.
A 3% COLA would raise an average monthly benefit of $1,787.00 by a little more than $53.60, bringing the monthly benefits to roughly $1,840.60.
In recent years, the coronavirus (COVID-19) pandemic’s impact on inflation led to abnormally high adjustments, including a 5.9% increase in 2022 and an 8.7% increase in 2023.
In 2023, an average of nearly 67 million Americans per month collect Social Security benefits, totaling over $1 trillion dollars in benefits paid during the year, according to the Social Security Administration.
