In a move reflecting the recent decline in overall inflation, the U.S. Social Security Administration has announced a 3.2% increase in its cost-of-living adjustment (COLA) for the year 2024. This adjustment, the smallest since 2020, will affect nearly 65 million Americans receiving social security payments.
Starting in January, beneficiaries will see a 3.2% rise in their Social Security checks, potentially adding an extra $59 to the average monthly benefit of $1,705.79. Additionally, around 8 million Supplemental Security Income (SSI) beneficiaries can expect increased payments from December 30 onwards.
This year’s increase stands in stark contrast to the substantial 8.7% boost implemented in the previous year, which marked the largest hike since 1981. COLA adjustments are crucial to preserving the purchasing power of Social Security benefits, ensuring they keep pace with inflation rates. Although inflation had surged to as high as 6% earlier this year, it was last recorded at 3.7% in September.
AARP Chief Executive Officer, Jo Ann Jenkins, expressed relief on behalf of retirees, acknowledging the financial challenges they face amidst rising prices. Jenkins emphasized the vital role of Social Security in providing financial security for millions of Americans, highlighting the program’s commitment to delivering on its promise.
The September consumer price index, released by the Commerce Department, matched the prior month’s tally at 3.7%. This figure, slightly above Wall Street’s 3.6% forecast, was bolstered by increases in oil and energy prices. On a monthly basis, the index showed a 0.4% rise, a decrease from August’s 0.6% but slightly higher than the Street’s 0.3% estimate for September.
Core inflation, excluding volatile elements such as food and energy, slowed to 4.1%, the lowest in two years. The monthly reading of 0.3% aligned with Wall Street’s predictions, indicating a stabilizing trend amidst recent economic fluctuations.