What to Expect for Social Security 2024 Cost of Living Adjustment, #159

Jul 26

As we continue to have higher than usual inflation, those receiving Social Security benefits may wonder about the cost-of-living adjustment (COLA) for 2024. On this episode, we’ll take a look at the history of these Social Security adjustments, how things are shaping up for 2024, and what you need to do to stay ready for retirement.

You will want to hear this episode if you are interested in...

Examining the history of COLAs [2:38]
The COLA forecast for 2024 [5:19]
Action steps for this year’s COLA [6:59]

Understanding COLAs

In 1975, the Social Security Administration (SSA) started issuing cost-of-living increases for Social Security benefits. These COLAs were designed to compete with inflation and ensure retired Americans had enough resources to live on. In the 48 years since, SSA has only had a zero percent increase 4 times, with the average being 3.78%, and the largest COLA in 1980 with an increase of 14.3%.

Social Security COLAs are determined by changes in the Consumer Price Index for Urban Wage Earners and Clerical Workers, also known as the CPI-W. By taking the third quarter CPI-W of the current year and dividing it by the third quarter CPI-W from the prior year, the SSA uses that percentage increase to quantify the cost of living adjustment for the following year. So what will this year’s COLA bring? While we still have a little bit to go in quarter three, the picture is gaining clarity. Listen to this episode for my analysis and tips to stay ready for retirement!