In a world where financial security and retirement planning are hot-button topics, the recent announcement by the Social Security Administration brings a breath of fresh air. On October 12th, 2023, the administration revealed that Social Security benefits will increase by 3.2% in 2024, offering much-needed relief to millions of beneficiaries. A beneficiary is a person or entity designated to receive the benefits of property owned by someone else. This annual cost-of-living adjustment (COLA) is a promising step toward helping retirees maintain their financial footing amidst inflation.
Moderating Inflation And 2024 COLA
The 3.2% increase projected for 2024 might appear modest compared to the impressive 8.7 percent jump in 2023 or the 5.9 percent boost in 2022. However, it’s important to recognize that this change is not in isolation but rather a reflection of moderating inflation. The COLA announcement closely follows the release of the latest Consumer Price Index (CPI) report, which found that inflation has increased year-over-year. While inflation remains relatively high, it’s notably lower than the 40-year high of 9.1% experienced last June.
What This Means
The increase in Social Security benefits is expected to impact the lives of 66 million beneficiaries. On average, Social Security retirement benefits will rise by approximately $50 per month, effective in January 2024. The average monthly retirement benefit for workers will increase from $1,848 to $1,907. However, 7.5 million Supplemental Security Income (SSI) beneficiaries will witness the increase in their December checks. This is particularly beneficial for those who rely on Social Security and SSI benefits, offering immediate relief to their cost of living.
Wage Cap For 2024
The Social Security Administration also announced the 2024 wage cap. The maximum amount of earnings subject to the Social Security tax, also known as the taxable maximum, will rise to $168,600, marking a 5% increase from the previous year’s cap of $160,200. This adjustment is crucial as it ensures that the tax base keeps pace with the growth in earnings and cost of living.
Impact On Retirees And Beyond
The importance of this annual benefit adjustment cannot be understated, especially in the context of an aging population and rising living costs. Retirees can now breathe a little easier knowing they will soon receive an increase in their Social Security checks to combat the rising prices. Older Americans, who have been feeling the pinch when buying groceries and paying for gas, can now look forward to a bit of financial relief.
Partner With GMS!
In a world where the financial landscape is ever-shifting, a crucial player takes center stage – a professional employer organization (PEO). Think of it as a strategic partner, working behind the scenes to ensure that businesses can seamlessly extend the benefits of Social Security to their employees. PEOs like GMS serve as a partner, navigating the intricate web of payroll management, tax compliance, and regulatory complexities, empowering businesses to optimize the benefits offered to their workforce. In a world where every dollar carries profound significance, GMS becomes the key player that connects businesses and their employees to financial stability. Contact us today to learn more.