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Every year, an adjustment is made to Social Security paychecks to reflect current cost of living demands. Some years see a significant boost, such as the 5.8 percent increase in 2009 as the country sought to climb out of a recession, while other years exhibit less growth, evidenced by the zero percent adjustment for 2016.
The Social Security Administration has announced the 2024 COLA as an increase of 3.2 percent, which is the lowest rate in 2 years. In the years since 2018, cost of living adjustments have measured 2.8, 1.6, 1.3, 5.9, 8.7, and 3.2 percent.
The cost of living adjustment is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers. But the index does not include the spending needs of people age 62 and over and some of the fastest growing consumer costs are found within this demographic. For example, the Medicare Part B premium has gone up 195 percent since 2000.
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Adjustments made to Social Security checks may be small, but the value of those checks are not. According to the Social Security Administration, the average monthly benefit paid out in 2023 is $1,827 to a retired worker and $1,358 for a disabled worker. These paychecks represent about 34 percent of all income for the elderly, as nine out of every 10 people age 65 and over collect Social Security. A cost of living adjustment of three percent means an increase of $50 for the average amount paid out to a retired worker.
Nearly half of married couples over age 65 depend on Social Security for at least half of their income and over 70 percent of unmarried beneficiaries do the same.
Christian Worstell is a licensed insurance agent and a Senior Staff Writer for MedicareSupplement.com. He is passionate about helping people navigate the complexities of Medicare and understand their coverage options.
His work has been featured in outlets such as Vox, MSN, and The Washington Post, and he is a frequent contributor to health care and finance blogs.
Christian is a graduate of Shippensburg University with a bachelor’s degree in journalism. He currently lives in Raleigh, NC.
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