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“3.2% COLA Boost for Social Security Recipients in ’24!

Recipients of Social Security benefits will get some good news as of 2024, when the Social Security Administration (SSA) will be giving an estimated 3.2-percent cost of living adjustment (COLA) for Social Security beneficiaries. COLA is an annual cost-of-living adjustment administered by the Social Security Administration for those receiving retirement benefits from the Social Security program. The adjustment compensates for increases in the cost of living over a one-year period, with the adjustment calculated by a formula based on the average increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). The estimated 3.2-percent increase for 2024 marks the highest COLA increase since 2011, when Social Security recipients received a 3.6-percent COLA. Before that, the COLA increase had been below 1.5 percent since 2008, as Social Security did not find a need for a higher adjustment. The increase for 2024 is welcome news, as the Social Security Administration has reported that more than 64 million Americans receive Social Security benefits. Most of those recipients include retirees over the age of 65, as well as disabled individuals and beneficiaries of deceased workers. Since COLA is based on the Consumer Price Index, the adjustment of 3.2 percent means that Social Security recipients will see more money in their monthly checks, as the current cost of living in the United States continues to rise. This additional money should help to offset some of the rising expenses that come along with living costs. The 2024 COLA increase will be implemented in January of that year. This means beneficiaries should begin seeing the additional funds in their Social Security checks come February 2024. Though the COLA increase is more than welcome for Social Security recipients, it may not be much help with rising living expenses. According to research, retirees need to save three to five times their annual income to maintain their current standard of living in retirement. As such, recipients of Social Security benefits should take the time to create a retirement plan that will ensure their long-term financial security. This includes creating an emergency fund for emergencies and unexpected costs, as well as investing in vehicles such as 401(k)s and IRAs to ensure their financial stability in the long-term. Though the COLA increase of 3.2 percent is not life-changing in itself, it can still contribute to helping Social Security recipients manage their budget and create a financial plan for retirement. Those receiving benefits should consider this increase when budgeting for the year and creating a long-term plan for financial security.