Goodbye to the Cost-Of-Living Adjustment in 2024 – Social Security announces that checks will change again

The Social Security Administration has announced that Social Security checks will change again before the end of the year. Every day we get closer to the final number that will change Social Security and its beneficiaries. Next month you will be able to say goodbye to any expectations about the COLA (cost of living adjustment), but for now, it is wise to take a closer look at how things are going and prepare your pocketbook for the good or bad news. Read on to find out more.

Why is Social Security changing your checks again?

Social Security is a set of programs designed to help Americans avoid poverty and meet their basic needs when an unexpected or unavoidable situation arises. Following this mission, the amount of money that each program provides must be enough to cover these bills. However, the economy is not a static system; it changes every day. An adjustment is needed to keep up with the changes and maintain the purchasing power of the people. This is done by calculating and implementing an index commonly known as the COLA. To simplify the process, adjustments are made every year and are designed to reflect changes in the economy and prepare for whatever may happen next.

How will the Social Security change be implemented?

Essentially, the COLA is calculated in October using the average of the CPI-W (Consumer Price Index for Urban Wage Earners and Clerical Workers) for July, August, and September of the previous year. This figure is compared to the same calculation from the previous year, and the difference is what we call the COLA. Once the COLA is calculated, Social Security uses it to adjust the amount each beneficiary receives and other values, such as the income limits that define who can apply for their programs or to adjust the credit values assigned according to your Social Security tax contributions. Therefore, the impact of the COLA is broad and complex.

How much will you increase your Social Security with this change?

Since there is no definitive value for the COLA, you can take a conservative approach and calculate using what you receive each month, adjusted by the current estimates of how this index will behave. The latest COLA projections from the TSCL (the Senior Citizens League, an organization that advocates for the rights of seniors) indicate that the index will increase from 2.57% to 2.63%. This can be interpreted as good or bad news, depending on which part of the problem you are analyzing. Good, because as a senior you will have a larger nominal increase, meaning the amount of money you will receive next year will be higher.