Every year, Social Security adjusts benefit amounts to account for inflation through a cost-of-living adjustment (COLA).
On Oct. 12, the Social Security Administration (SSA) announced a 3.2% COLA for 2024. That means Social Security retirement benefits will increase by roughly $50 per month on average beginning in January 2024, SSA says.
This adjustment is significantly lower than the 8.7% increase that beneficiaries saw in 2023, and some people online say the 2024 increase isn’t enough.
VERIFY looked into whether the 2024 COLA is historically low.
THE QUESTION
Is Social Security’s 2024 cost-of-living adjustment (COLA) historically low?
THE SOURCES
THE ANSWER
No, Social Security’s 2024 cost-of-living adjustment (COLA) is not historically low.
WHAT WE FOUND
While Social Security benefits will not increase in 2024 by as much as they did the previous year, the cost-of-living adjustment isn’t historically low.
The 3.2% cost-of-living adjustment (COLA) for 2024 is “well above the 2.6% average over the past 20 years,” the Senior Citizens League said in a press release on Oct. 12.
It’s also the third highest COLA in the last decade, SSA data show. The only two years with higher adjustments were 2022 and 2023, when benefits increased by 5.9% and 8.7%.
The 2024 COLA is significantly lower than it was last year due to the state of inflation, which skyrocketed over the last few years but has started to normalize again.
The COLA is calculated based on the percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), an inflation gauge measured by the U.S. Bureau of Labor Statistics (BLS). It measures the average change over time in the prices that workers are paying in a “basket of consumer goods and services.”
SSA explains that the COLA is equal to the percentage increase in the CPI-W from the third quarter average of the previous year to the same average from the current year. If there is an increase, it’s rounded to the nearest tenth of a percent. That same increase is applied to monthly Social Security payments.
To determine the 2024 COLA, SSA compared the CPI-W for July, August and September of 2022 to the same period in 2023.
The CPI-W increased 2.6% annually in July, 3.4% annually in August and 3.6% annually in September, BLS data show. That averages out to 3.2%.
Social Security will notify people about new benefits before end of 2023
Social Security will begin mailing notices about recipients’ new benefit amounts in early December, SSA says.
Those who want to know their benefit amount sooner can find their COLA notice online through their Social Security account.
Social Security recipients will need to set up their accounts by Nov. 14, 2023, to get their COLA notice online, according to SSA.
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