Social Security benefits rise 3.2%
Retirees will see the bump in Jan.
More than 71 million Americans receiving Social Security benefits will see their checks rise 3.2 percent next year to help them keep pace with inflation, the Social Security Administration said Thursday. That’s more than the typical cost-of-living adjustment but a significant drop from the record-setting bump of 8.7 percent in 2023 amid rampant inflation.
Starting in January, retired workers’ average benefit will rise $59 monthly to $1,907, up from $1,848.
“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,” Jo Ann Jenkins, chief executive of AARP, said in a statement. “We know older Americans are still feeling the sting when they buy groceries and gas, making every dollar important.”
Retirees and their dependents receive more than threequarters of all Social Security benefits paid, but millions of other beneficiaries will also receive the increase, including disabled workers, survivors of workers, and low-income people as part of the Supplemental Security Income program. The latest bump in benefits exceeds the 2.6 percent average over the past 20 years, experts said.
Prices are still elevated but have eased considerably since pandemic-related disruptions and supply shortages drove them up sharply. The Federal Reserve has tried to cool inflation by raising its benchmark interest rate, in a series of moves, to its highest level in 22 years.
Social Security benefits are particularly important to lowerand middle-income retirees, many of whom do not have workplace retirement accounts such as 401(k)s, and the matching contributions from employers that often accompany them. But what really sets Social Security apart from other sources of retirement income are its lifetime inflation adjustments, which help retirees to maintain their buying power as the costs of housing, food, and medical care rise. This is especially crucial if Social Security makes up most or all of a household’s income.
“Unlike Social Security, the value of private savings — like 401(k)s and IRAs — erodes over time,” said Kathleen Romig, director of Social Security and disability policy at the Center on Budget and Policy Priorities, a nonpartisan research and policy group. “Most pensions aren’t adjusted for inflation, either. Social Security is the only form of retirement income that keeps up with inflation.”
Retirees often see some of that extra money eaten up by rising Medicare Part B premiums, which cover doctor visits and outpatient hospital services and are automatically deducted from Social Security checks. In its annual report to Congress, the Medicare board of trustees projected that premiums would rise to $174.80 in 2024, up from $164.90.