The Social Security Administration (SSA) provides benefits to millions of Americans who depend heavily on the Internet through its provision of various benefits, including those for retired employees, dependents, and disability payments, including Social Security Disability (SSDI) and Supplemental Security Income (SSI).
These benefits are subject to an annual adjustment referred to as the expense of Living Adjustment (COLA), designed to ensure that they maintain pace with the rising cost of living and do not erode beneficiaries’ purchasing power.
How Social Security’s COLA is Calculated
The COLA is directly proportional to the annual increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).
To calculate this adjustment, the SSA considers data from the previous year’s third quarter through the current year’s third quarter, specifically the CPI-W data for both years’ July, August, and September.
In 2021, for instance, the CPI-W rose 8.7% compared to the previous year. In consequence, Social Security payments increased by 8.7% in 2023.
Predictions have been made about the COLA percentage 2024 based on CPI-W data, but the exact percentage has yet to be officially announced.
Once the July, August, and September CPI-W data are available for calculation, the avidly anticipated announcement of the annual COLA adjustment is typically made.
This means that the official percentage of COLA for 2024 will be announced in October of this year.
Last year’s announcement was made on October 12, coinciding with the report’s publication using the Bureau of Labor Statistics’ Consumer Price Index.
The COLA adjustment is applied to Social Security and SSI payments beginning in January of the following year.
Forecasts for the Social Security COLA for 2024.
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Forecasting Social Security’s 2024 COLA: What to Expect
While the official COLA percentage for 2024 has yet to be determined, experts and organizations actively monitor economic indicators to make forecasts.
The Senior Citizens League, a reputable nonpartisan senior organization, estimates that the Social Security cost-of-living adjustment for 2024 will be around 3%.
This estimate is based on information from the consumer price index for July.
The COLA adjustment is essential to ensuring the financial security of Social Security beneficiaries. Predictions indicate a 3% increase for 2024 while we await the official announcement in October.
It is crucial to remember that this estimate is subject to change, which could affect the security of millions of Americans who depend on these benefits.
Stay tuned for the announcement’s official release in October to learn how this change will impact your or your family’s Social Security benefits for the upcoming year.
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