As August comes to a close, Social Security recipients are preparing to receive their final payments for the month. This marks the last round of payments before the anticipated Cost-of-Living Adjustment (COLA) takes effect in January 2024. This annual increase is crucial for many retirees as it helps offset inflation and the rising costs of living.
Understanding COLA: What It Means for You
The Social Security Administration (SSA) implements the COLA every year to ensure that benefits keep pace with inflation. The 2024 COLA is set to increase Social Security payments by 3.2%. While this is lower than the 8.7% increase in 2023, it is still above the average COLA over the past 20 years, which has been around 2.6%.
This adjustment is determined by comparing the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the third quarter of the current year to the same period the previous year. If there’s an increase in the CPI-W, benefits are adjusted accordingly.
When Will the New Payments Begin?
The new COLA will start impacting payments in January 2024. For those who rely on Supplemental Security Income (SSI), the increased payments will begin a bit earlier, with the first adjusted payment expected on December 29, 2023. Beneficiaries can expect to see their new monthly amounts reflected in their January checks.
What to Expect in Your September Payment
For August, there are no changes to the Social Security payments. These will continue as scheduled, with the standard payment dates depending on your birthdate:
- Those born on the 1st to the 10th of any month will receive their payment on the second Wednesday.
- Those born on the 11th to the 20th will receive theirs on the third Wednesday.
- Those born on the 21st to the 31st will see their payments on the fourth Wednesday of the month.
How Much Will Your Benefits Increase?
On average, the 3.2% increase means that recipients could see an additional $57.30 in their monthly benefits. This increase will help millions of retirees, who rely on Social Security, to manage the ever-increasing costs of living. However, it’s important to note that the actual increase in your benefits will depend on your current monthly amount.
Looking Ahead: Preparing for 2024
As we approach the end of 2023, beneficiaries are advised to keep an eye on any communication from the SSA regarding their new benefit amounts. The SSA will begin mailing out COLA notices in December, but you can also view your new benefit amount online through your “My Social Security” account.
To ensure you receive timely updates, make sure your account is set up to receive notifications via text or email. This can be especially helpful if you want to avoid waiting for your mailed notice.
Why COLA Matters
The COLA adjustment is more than just a routine increase in benefits; it’s a vital tool that helps retirees maintain their purchasing power in the face of inflation. Without these adjustments, the fixed income from Social Security would lose its value over time, making it harder for retirees to cover basic expenses like food, housing, and healthcare.
Conclusion
The final Social Security payments for August are just around the corner, and for many, they mark a turning point as they prepare for the increased payments coming in January 2024. With the 3.2% COLA on the horizon, it’s a good time to review your financial plans and consider how the additional funds might impact your budget in the coming year.
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