The cost of living adjustment, or COLA, means the average beneficiary will receive more than $50 more per month starting in January, the Social Security Administration said Thursday. The nonprofit AARP estimates the increase at $59 a month.
“This will help millions of people continue to meet their expenses,” said Kilolo Kijakazi, acting commissioner of Social Security.
About 71 million people—including retirees, the disabled, and children—receive Social Security benefits.
Thursday’s announcement follows an 8.7% increase in benefits this year, due to 40-year-high inflation that has driven up the price of consumer goods. With lower inflation, the next annual increase will be smaller.
However, the main proponents accept the annual change.
“Retirees can rest easy at night knowing they will soon receive an increase in their Social Security checks to help them keep up with rising rates,” said AARP CEO Jo Ann Jenkins. “We know that older Americans still feel the pinch when they buy food and gas, making every dollar count.”
Social Security is funded by payroll taxes collected from workers and their employers. The maximum amount of earnings subject to Social Security payroll taxes will be $168,600 in 2024, up from $160,200 in 2023.
Nancy Altman, president of Social Security Works, a social security program advocacy group, said the COLA is a “reminder of the incredible importance of Social Security” and that “Congress must pass laws to protect it, and the benefits will be extended.”