How to identify your Social Security COLA increase for 2024

How to identify your Social Security COLA increase for 2024

In a matter of weeks, the Social Security Administration (SSA) will officially announce its annual cost-of-living adjustment (COLA) for the year 2024.

Experts anticipate that the 2024 Social Security COLA will be approximately 3.2%, resulting in an estimated monthly increase of around $58 for the average retiree, based on inflation data and economic indicators.

Here’s how you can get an early estimate of the increase in your own Social Security benefits:

How to Determine Your 2024 Social Security COLA:

The SSA is expected to make the official announcement of the 2024 COLA increase in mid-October and will send notices to beneficiaries throughout the remainder of the year. This adjustment is projected to be significantly lower than last year’s 8.7% increase, which was the largest in four decades, due to a decrease in inflation in 2023.

To get an early estimate of your benefits, you can create an account on SSA.gov. After successfully verifying your account, you’ll be able to access an estimate of your retirement benefits and see how they may change depending on your retirement age.

Once the COLA is officially announced, you’ll receive a notice detailing your exact adjustment within the “messages” section of your SSA portal. To ensure you don’t miss any important notifications, you can choose to receive email or text notifications through the message center preferences.

If you prefer to calculate the increase yourself, you can do so by multiplying the percentage increase (in this case, 3.2% or 0.032%) by your current monthly benefit amount. For example, if your current monthly benefit is $1,822 (the average for retirees), you can estimate that your monthly benefit for 2024 will be around $1,880, reflecting a $58 increase.

Maximizing Your Social Security Income:

Social Security benefits typically make up approximately 30% of the income for individuals aged 65 and older, with nearly 9 out of 10 people in this age group receiving Social Security payments.

With monthly benefits averaging $1,822, rising interest rates, and increased food prices, it can be challenging for retirees to cover their expenses. However, there are strategies to stretch and supplement these benefits to align with your lifestyle.

One option is to deposit your Social Security payments, or a portion of them, into an interest-bearing account. Many banks and credit unions currently offer high-yield savings accounts with competitive rates, often reaching 4% or even 5%.

For retirees who can commit to setting aside a portion of their monthly payments for a fixed period, a certificate of deposit (CD) might be a beneficial choice. These accounts generally offer more attractive annual percentage yields (APYs) in exchange for locking up funds.

Another alternative is a money market account, which generates interest while providing easier access to your funds through features like debit cards or check-writing privileges.

The annual COLA is determined based on the percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) published by the Bureau of Labor Statistics. The calculation uses data from the third quarter of the preceding year to the third quarter of the current year.

How to Set Up an Account on MySSA:

To effectively manage your benefits and access important information, it’s essential to set up an account on the SSA website. Here’s a guide on how to navigate the process:

  1. Account Setup: Creating an account is a straightforward process that can be done at any time, regardless of your retirement timeline. You’ll need to provide your email address and at least one additional form of authentication, such as a phone number or secondary email, to verify your identity.
  2. Key Information: During the setup, you’ll be prompted to enter critical information, including your Social Security number, full name as it appears on your Social Security card, date of birth, address, and phone number.
  3. Account Features: Once your account is established, you can utilize it to manage your benefits, estimate future benefits, request a replacement Social Security card if needed, check the status of benefit applications, and more. You can also opt to receive all notices electronically, eliminating the need for paper mail.

Creating a MySSA account empowers you to stay informed about your Social Security benefits and manage your financial future effectively.

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Disclaimer: The views, suggestions, and opinions expressed here are the sole responsibility of the experts. No Sandiego Currents journalist was involved in the writing and production of this article.

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