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Social Security payments will rise 3.2% in 2024

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Social Security payments will rise 3.2% in 2024

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Social Security benefits will increase by 3.2% in 2024, the Social Security Administration announced Thursday morning.

That adds about $50 monthly to the average retirement benefit consumers will receive beginning in January. The annual increases are called cost of living adjustments, or COLA.

The agency said people on Social Security will start getting the increased payments on December 29.

“Social Security and SSI benefits will increase in 2024, and this will help millions of people keep up with expenses,” said Kilolo Kijakazi, acting commissioner of Social Security.

The cost of living adjustment is calculated based on an average of the inflation readings for the months of July, August and September. Specifically, it’s based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) published by the Bureau of Labor Statistics.

The CPI-W rose 2.6% in July, 3.4% in August and 3.6% in September, according to the latest inflation data released by the bureau on Thursday.

“Retirees can rest a little easier at night knowing they will soon receive an increase in their Social Security checks to help them keep up with rising prices. We know older Americans are still feeling the sting when they buy groceries and gas, making every dollar important,” said Jo Ann Jenkins, CEO of the nonprofit American Association of Retired Persons, in an emailed statement.

However another advocacy group for older Americans, the Senior Citizens League, has argued that larger increases are required, especially for older retirees. It contends that the costs of the goods and services they need are growing much faster than Social Security benefits.

The group says people who retired before 2000 would need an additional $500 in benefits every month just to get back the purchasing power they had in 2000.

Almost 67 million people have been receiving Social Security benefits in 2023, according to the SSA. Most of those are retirees, as almost 90% of people over the age of 65 were getting those benefits as of June 30.

Inflation rocketed to 40-year highs in 2022 in the wake of a combination of pandemic stimulus payments, an increase in shopping and spending, and widespread supply chain problems. That prompted the Federal Reserve to raise interest rates at a rapid pace. The benchmark U.S. interest rate is now the highest it’s been in more than 20 years.

That has slowed the economy somewhat in 2023 compared to last year, but inflation remains higher than it was throughout the 2010s.

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