Social Security Announces 2024 COLA

The Social Security Administration recently announced a 3.2% Cost of Living Adjustment (COLA) for 2024. This means that the average monthly Social Security retirement benefit will increase by approximately $57 to $1,849. However, it is important to note that the actual amount may vary for each individual.

To determine this increase, we compare the third-quarter Consumer Price Index (CPI) with that of the previous year. However, does the CPI accurately reflect the inflation that retirees have experienced in the past year?

According to a specific measure developed by the Bureau of Labor Statistics, retirees may actually be falling behind. The CPI takes into account the spending habits of older individuals and has shown an inflationary rise of 4.15% between August 2022 and August 2023. This is higher than the most recent adjustment which means that some retirees may feel pinched financially.

The annual announcement of the Social Security COLA is always a good time to reassess your income and expenses to ensure your financial strategy aligns with your goals. Please feel free to reach out if you have any questions or simply want to review your financial plan for the upcoming year.