In 2023, Social Security and Supplemental Security Income (SSI) recipients saw an 8.7% increase to the benefits, the largest since 1981, due to an annual cost-of-living adjustment based on inflation rates.
The 2023 COLA raised the average Social Security retirement benefit by about $146 per month.
Now, John and other VERIFY readers are asking if the 2024 COLA is expected to be as much as it was in 2023.
Is Social Security’s next cost-of-living adjustment (COLA) expected to be as much as it was in 2023?
No, Social Security’s next cost-of-living adjustment (COLA) is not expected to be as much as it was in 2023. But Social Security recipients will still see an increase in their monthly benefit payments.
WHAT WE FOUND
The Social Security Administration (SSA) adjusts benefit amounts every year to account for inflation through a cost-of-living adjustment (COLA). SSA will announce the 2024 COLA in October.
The 2024 COLA is expected to be around 3%, based on two Social Security experts’ predictions.
The Senior Citizens League’s most recent estimate for the 2024 COLA is 3.2%. Alicia Munnell, who serves as director for the Center for Retirement Research at Boston College, said in late July that she expects the 2024 COLA to be 3.4%.
These estimates are subject to change based on monthly inflation data.
The estimated 2024 COLA is significantly lower than the 8.7% increase that beneficiaries saw in 2023. That’s because inflation skyrocketed in 2022 but has started to normalize again this year.
If the Senior Citizens League's estimate of 3.2% holds true, the COLA would still increase the average Social Security retiree benefit of around $1,790 by about $57 per month in 2024.
How the COLA is calculated
The COLA is calculated based on the percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), an inflation gauge measured by the U.S. Bureau of Labor Statistics (BLS). It measures the average change over time in the prices that workers are paying in a “basket of consumer goods and services.”
SSA explains that the COLA is equal to the percentage increase in the CPI-W from the third quarter average of the previous year to the same average from the current year. If there is an increase, it’s rounded to the nearest tenth of a percent. That same increase is applied to monthly Social Security payments.
To determine the 2024 COLA, SSA will compare the CPI-W for July, August and September of 2022 to the same period in 2023.
COLAs for the SSI program, which provides monthly payments to adults and children with a disability who have limited incomes and resources, are generally the same as those for Social Security, though they usually take effect the month after Social Security benefit increases, SSA says on its website.