Social Security benefits will rise by 3.2% in 2024, far below the increases that retirees received during the past two years as inflation continues to moderate, the Social Security Administration said Thursday.
More than 66 million Americans collecting Social Security will receive the bigger payments beginning in January, the administration said.
“Retirees can rest a little easier at night knowing they will soon receive an increase in their Social Security checks to help them keep up with rising prices,” said Jo Ann Jenkins, AARP chief executive. “We know older Americans are still feeling the sting when they buy groceries and gas, making every dollar important.”
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The payment boost marks a steep decline from 2023, when recipients received an 8.7% bump, the highest in four decades. However, it remains higher than the 2.6% average increase recorded over the past two decades.
An increase of this magnitude will raise the average retiree benefit of $1,907 by about $59 per month.
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But even with the payment increase, retirees say they are still struggling to keep up with persistently high inflation.
A recent survey conducted by the Senior Citizens League found 68% of retirees reported that their household expenses remain higher than one year ago, even though inflation has eased. They said this situation has persisted over the last year.
“Worry that retirement income won’t be enough to cover the cost of essentials in the coming months is a top concern of 56% of survey respondents,” said Mary Johnson, Social Security and Medicare policy analyst at the Senior Citizens League. “Social Security cuts are an even bigger concern.”
The annual Social Security change is calculated based on the consumer price index for Urban Wage Earners and Clerical Workers, or the CPI-W, from July, August and September.
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The group has pushed Congress to adopt legislation that would index the adjustment to inflation specifically for seniors, such as the consumer price index for the Elderly, or the CPI-E. That index tracks explicitly the spending of households with people 62 and older.
“An inflation measure that does not adequately measure and accurately account for the portion of income spent on health care tends to undercount the actual rate of inflation and shortchange the Social Security COLA,” Johnson said.
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