Social Security COLA Announced as 3.2% for 2024

The cost-of-living adjustment for 2024 will be 3.2% for more than 71 million Americans who receive Social Security, the Social Security Administration announced Thursday. 

Retirees’ monthly payments will therefore rise by an average of about $59 to an estimated average of $1,907, starting in January 2024. Increased payments to approximately 7.5 million Supplemental Security Income recipients will begin on December 29, 2023.

“Like working Americans, retirees always appreciate getting a pay raise,” says Sri Reddy, senior vice president of retirement and income solutions at Principal, by email. “Seeing a COLA adjustment at 3.2% is a reasonable increase given current price levels and inflation in the economy. However, because every retiree’s personal situation is different and their consumption basket varies, they may need to make other tradeoffs and choices to ensure their income keeps up with their lifestyles.”

The adjustment was significantly lower this year than in recent years due to reduced inflation. Recipients had received increases of 8.7% for 2023 and 5.9% for 2022. The average adjustment over the last 20 years was 2.6%. 

The maximum amount of earnings subject to the Social Security tax will also increase to $168,600.  

The COLA is based on inflation data from the year’s third quarter, published Thursday morning by the Bureau of Labor Statistics in the Consumer Price Index for All Urban Consumers. 

In addition to the COLA, the earnings limit for workers younger than full retirement age will increase to $22,320, and the earnings limit for people reaching their full retirement age in 2024 will increase to $59,520. The SSA deducts $1 from benefits for each $3 earned over $59,520 until the month the worker reaches full retirement age.  

There is no limit on earnings for workers who are full retirement age or older for the entire year.  

More information about the COLA, tax, benefit and earning amounts for 2024 is available on the SSA website.