Social Security benefits will rise by 3.2 percent next year, the Social Security Administration announced Oct. 12.
The annual cost-of-living adjustment (COLA) announced for 2024 is far lower than this year's big 8.7 percent jump or the 5.9 percent boost in 2022, a reflection of moderating inflation. The COLA announcement comes on the heels of the latest Consumer Price Index report, also out Oct. 12, which found that inflation is up year-over-year. While still high, that's significantly lower than the 40-year high of 9.1 percent last June.
On average, Social Security retirement benefits will rise by around $50 per month beginning in January, the Social Security Administration said. The average monthly retirement benefit for workers will be $1,907, up from $1,848 this year.
Although most beneficiaries—roughly 66 million people—will see the increase beginning in January, approximately 7.5 million Supplemental Security Income (SSI) beneficiaries will see the increase in their December checks. Some people receive both Social Security and SSI benefits.
The Social Security Administration also announced the 2024 wage cap. The maximum amount of earnings subject to the Social Security tax (taxable maximum) will increase to $168,600. That's up about 5 percent from the $160,200 maximum in 2023.
The announcement reflects the findings of several reports showing that although inflation has cooled in the past year, persistent cost of living is still hitting Americans, including retirees, hard.
Although the annual rise in benefits is smaller than in the past two years, it's still welcome news for many.
"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.
AARP CEO Jo Ann Jenkins agreed, saying in a statement that "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."
The administration also posted a fact sheet summarizing the 2024 cost-of-living adjustments.