October 12 is a big day for everyone who is receiving benefits from the Social Security Administration. On October 12, 2023, the Social Security Administration will announce changes to Social Security benefits, including the cost of living adjustment for Social Security benefits in 2024.
The Social Security cost-of-living-adjustment, or COLA, is based on changes to the Consumer Price Index that occur yearly. Once the Consumer Price Index for September 2023 is released, the SSA can figure out how much they need to increase Social Security benefits. The announcement of the COLA for 2024 will happen on October 12, 2023. It’s expected the Social Security COLA for 2024 will be 3%-3.5%.
The Importance of COLA
The cost-of-living-adjustment or COLA implemented by the Social Security Administration (SSA) is very important for everyone who receives benefits from the SSA. As you probably have noticed, the cost of things like rent, food, and utilities keeps going up.
And, unless the amount of money that people who are getting Social Security benefits get increases, they won’t be able to pay for the essentials they need to live. That’s why every year the SSA increases the amount of money that people receive based on the amount of inflation that has occurred during the year and other financial factors.
The increase in the amount of benefits that people receive can be life-changing for the people who rely on Social Security disability benefits from the SSA. In 2023, the SSA had the largest COLA in history at 8.7%.
To put this in real terms: for the people who get benefits, the amount of money they received increased by around $200 per person. An increase like that allows people who can’t work or who have retired to be able to buy enough food, pay their bills, and stay in their homes.
The COLA adjustment for 2023 was not typical. The huge increase was largely due to the unprecedented rates of inflation that happened in the last few years. In 2021 there was a 5.1% COLA increase in Social Security benefits. But before that, the average COLA increase for Social Security benefits was between 1%-3%.
The Social Security Administration will announce the 2024 COLA on October 12, 2023. Experts predict this year’s COLA will be around 3%. If the 2024 Social Security cost-of-living-adjustment is 3%, that means that most people who are getting Social Security benefits will see an increase of around $60 a month.
The 2024 COLA Announcement
On October 12, 2023, at 8:30 AM (ET) the Social Security Administration will release the COLA for 2024. There are a couple of different factors that will impact what the 2024 COLA is and how much of an increase in benefits people will actually get if they’re receiving Social Security benefits.
The first factor that influences the COLA is inflation. The amount of the COLA is based on the amount of inflation that’s measured by the Consumer Price Index (CPI). The CPI data for September 2023 will have a direct impact on the amount of the increase in Social Security benefits. Since inflation has slowed, experts predict that the COLA for 2024 will be less than half of the COLA for 2023.
Another factor that will influence how much money people actually see in their monthly check is the cost of Medicare Part B. People who are on Medicare and also receive Social Security benefits have the cost of their Medicare Part B premiums deducted directly from their benefits. If the cost of Medicare B premiums increases, people will see less money in their Social Security benefit checks even after the COLA.
Many of the people who receive Social Security benefits are anxiously awaiting the Social Security Administration’s COLA announcement on October 12th because it means that they will be able to budget better for the future knowing that they will start receiving more money in 2024.
Estimated COLA for 2024
Experts predict that the Social Security COLA for 2024 will be between 3% and 3.5%. That might seem like a small number compared to last year when the COLA was a whopping 8.7%. But, it is important to note that, the record-setting 8.7% COLA in 2023 was in response to record-setting inflation that made it very difficult for people who depend on Social Security benefits to buy necessities like food and pay for rents that also jumped by record amounts.
A 3%-3.5% cost-of-living-adjustment is slightly higher than the average COLA for the last 20 years, and now that inflation is slowing down, it should be enough to help many people continue to live comfortably.
Potential Effects on Social Security Recipients
If the 2024 Social Security is around 3% as the experts predict, that would mean about $60 more in benefits per month for most people. Even though that’s not as much as the 2023 Social Security COLA increase, any additional money can be a help to people who are living on Social Security benefits.
Thankfully, the inflation that caused rapid and enormous price hikes in food, rent, and the cost of goods people need to survive has slowed down. This has made it a little more affordable to buy essentials and pay bills. However, with healthcare costs continuing to increase, people whose primary income is Social Security benefits can definitely use the COLA 2024 increase to pay their bills and get what they need each month.
People who are getting Social Security benefits and receive Medicare Part B should pay close attention to how much the premium cost of Medicare Part B is going to increase in 2024. It could be that the increased cost of the premium will offset any extra money they would have gotten from the COLA.
Other Social Security Changes on October 12
The COLA isn’t the only announcement that the Social Security Administration will be making on October 12, 2023. In fact, there are two other announcements that will have an effect on people who are getting Social Security benefits.
The first additional announcement is how much the retirement earnings test exempt amount will increase. The retirement earnings test exempt amount is something that people who are still working but who are also receiving Social Security retirement benefits need to know.
People who take their retirement benefits but haven’t reached full retirement age can make up to a certain amount of money without it impacting their benefit amount. If they earn more than the retirement earnings test exempt amount the amount of the benefit they receive will be less. The retirement benefits test exempt amount changes yearly based on the national average wage index.
The second additional announcement is the announcement of the increase in the maximum taxable earnings limit. The maximum taxable earning limit affects the amount of money that employees can have matched by their employer that goes to fund Social Security benefits.
Social Security benefits of all kinds are funded through a dedicated payroll tax. When employees are paid 6.2% of their gross pay goes to fund the Old-Age, Survivors, and Disability Insurance Trust Funds. Employers match whatever funds the employees contribute so the total amount contributed is 12.4%.
In 2023, the maximum taxable earning limit for employees was $160,200. If an employee earned more than that, those earnings did not have the 6.2% deduction taken. The maximum taxable earnings should increase in 2024, and the SSA will announce the new amount on October 12, 2023.
The Significance of October 12 in Social Security
October 12 is important because it is the day that the SSA announces its official COLA for the next year. This occurs on October 12 because that is the date when the data from the September Consumer Price Index is released. The CPI is what the COLA and other updates from the Social Security Administration are based on. So, as soon as they get the September numbers, the SSA can release their own increases that will go into effect on January 1, 2024.
It's an important date for those receiving Social Security benefits because, once they know how much the COLA will be, they can start to budget for the next year. People who are receiving Social Security benefits often need to wait to do things like look for a new apartment or home until they know what their benefit amount will be in the next year.
With rent prices rising, many people need to know if they will be able to stay where they are in the new year or if they will need to start looking for a new apartment. People also need to know what their benefit amount will be so that they can plan big purchases or set up budget billing for their utilities.
If you’re receiving Social Security benefits and you’ve been wondering, “How much Social Security will I get in 2024?” make sure to look up the 2024 Social Security Administration COLA announcement on October 12, 2023 after 8:30 AM (ET). By that time, the SSA will have announced the 2024 COLA as well as both the retirement earnings test exempt amount and the maximum taxable earning limit for 2024. Experts say that the COLA will probably be between 3%-3.5%. You can use this Disability Calculator to figure out how much more money you will receive if the COLA is around 3%.
Everyone who receives Social Security benefits should stay informed about changes to the benefits that the SSA pays in order to maximize their benefits and use them wisely. If you’re applying for Social Security disability benefits now, or you want some expert advice about Social Security benefits, fill out a Free Case Evaluation now to get connected with a lawyer who subscribes to this site and can offer you personalized advice today—all at zero cost to you.
- Why Your Maximum Social Security Benefits Will Increase for 2024 Starting on January 1
- 2024 COLA Announced By The SSA
- What Is SSI?
- SSDI Application
- Disability Lawyer
- What Conditions Qualify For Disability?
- SSDI COLA
- Social Security Disability Benefits Pay Chart
- Why October 12 is a big day for Social Security recipients — (USA Today)
- 3 Social Security Changes We Should Learn About on Oct. 12 — (The Motley Fool)
- Cost-Of-Living Adjustment (COLA) — (United States Social Security Administration)
- Social Security Update — (United States Social Security Administration)
- COLA ESTIMATE FOR 2024 IS 3.2% — (The Senior Citizens League)