The new year is finally here, and the 2024 Social Security cost-of-living adjustment (COLA) is officially in effect. Some of you may have already received your first new-and-improved check, and if you haven’t, you can expect yours within the next couple of weeks. Below, we’ll talk about how much benefits are going up and what you can do if your checks don’t go far enough.
How big is the 2024 cost-of-living adjustment?
The 2024 Social Security COLA is 3.2%. That might not sound like much, but it’s actually above average. It’s expected to boost the average benefit by about $59 per month, from $1,848 in December 2023 to $1,907 in January 2024.
Of course, everyone’s benefit is different. You should have gotten a COLA notice in December indicating what your 2024 benefit would be. But if you’ve misplaced that or forgotten, you can get a rough approximation by adding 3.2% to your previous checks (or wait another week or two for your latest check to show up in your account).
If your 2023 benefit was larger than $1,848, you can expect to get a larger increase for 2024. And if your benefit was less than this amount, you’ll see a smaller boost.
One word of warning: It’s possible that the larger checks could cause you to run into Social Security benefit taxes. You could owe these if your provisional income — adjusted gross income (AGI) plus nontaxable interest and half your annual Social Security benefit — exceeds $25,000 for an individual or $32,000 for a married couple.
If you encounter these, you may get a smaller tax refund in 2025, or you could even owe money back to the government. Unfortunately, this is becoming increasingly common as average benefits rise. But some seniors may be able to avoid these benefit taxes by minimizing their spending throughout the year.
What if your Social Security checks aren’t enough?
Despite the above-average Social Security increase for 2024, many still argue that these checks don’t go far enough. The program has lost 36% of its buying power since 2000, according to the Senior Citizens League. This means that checks buy less today than they did in the past, placing more financial strain on seniors.
Many people in politics have argued for change, but so far, there’s been little progress toward an actual plan. So for the time being, it falls to individuals to come up with a solution to this issue on their own.
Some may be able to stretch their dollars further by reducing expenses, or they may choose to supplement their Social Security checks with a part-time job. Others may decide to delay Social Security benefits because the government increases your checks a little for each month you wait to sign up until you turn 70. But this may not be an option for those with short life expectancies or those in tight financial situations.
Another option is to look into other government benefits, like supplemental security income (SSI). This is a monthly benefit administered by the Social Security Administration to the blind, the disabled, and low-income seniors. However, there are strict eligibility requirements for the program. If you have any questions, contact the Social Security Administration for more information.
It can be tough to make ends meet when Social Security is your primary or only source of retirement income. The 2024 COLA helps, but don’t hesitate to explore other avenues of support if you find you’re still struggling once your new checks begin to arrive.