Low inflation numbers should ultimately benefit retirees. Social Security is an essential source of sustenance for a majority of retirees; nearly half of households with a member age 65 or older receive at least 50% of their income. According to data collected by the Social Security Administration (SSA), without Social Security, many seniors would be living in poverty.
Since many seniors depend on Social Security for their living expenses, the annual cost of living adjustment (COLA) is a very important part of their benefits, beneficiaries have an increase in their monthly checks in relation to how much the prices increased in the third quarter from one year to the next, although the third quarter of 2024 has not yet been reached, analysts are making their best estimates about what the COLA could be.
What is the Latest COLA Increase Forecast?
After the most recent reading of the consumer price index (CPI) for the month of May, the League of Seniors updated its forecast, now it is expected that seniors will have an increase of 2.57% in their checks from Social Security the following year. That’s lower than its previous forecast of 2.66% and well below the 3.20% COLA given to retirees this year, but a lower COLA could be a pleasant surprise for retirees.
A higher than average COLA is a sign of higher than average inflation, and inflation has been very detrimental to the value of Social Security, it has already penetrated the purchasing power of benefits, the average retiree who started getting benefits in 2000 has seen their cost of living increase significantly faster than their monthly checks, The Senior Citizens League estimates that they have lost approximately 36% of their purchasing power, this has been worsened by the high inflation of recent years.
Here’s How the SSA Calculates Your Next Payment Increment
The way the Social Security Administration calculates the annual COLA is to always look backward, since it is impossible to know exactly what inflation will be like in the future, the SSA only increases payments based on how much the living expenses grew the previous year. That means seniors will have to stretch out the money in their benefit checks during periods of high inflation.
On the other hand, low and stable inflation is good for Social Security beneficiaries, Social Security purchasing power improved much of the time the COLA was less than 3% since 2010, purchasing power improved 13% heaped in years when the COLA was less than 2% during that period.
Social Security Payments Being Issued TODAY
As you know so far, the SSA provides monthly benefits to people over the age of 65, people with disabilities, and surviving family members of deceased beneficiaries. Furthermore, adults and children with disabilities, as well as people age 65 and older, are eligible to receive Supplemental Security Income (SSI) benefits. By 2024, the maximum monthly SSI payment is $943 for an individual and $1,415 for a couple.
Today, Monday, July 1, the SSA will distribute monthly benefits to SSI recipients. These payments are always made on the first day of the month, unless it falls on a Friday or a holiday. For this reason, the June payments were made on the last day of May this year.
The payment schedule for retirement checks depends on the beneficiary’s birthday and how long they have been claiming benefits. Generally, payments are made on Wednesdays throughout the month, and those born at the beginning of the month receive their payments earlier.
For example, if your birthday is on April 5, you will receive your payment on the second Wednesday of the month, while if you were born on the 30th, you will be paid on the fourth Wednesday.
