MAINE, USA — More than 71 million Americans will benefit from the Social Security Administration's 3.2 percent cost-of-living (COLA) adjustment in 2024.
The SSA has increased the benefit to Americans enrolled in Social Security and Supplemental Security Income programs, including more than 390,000 Mainers. AARP estimates the increase will give social security recipients an average of $59 more dollars per month, AARP's Maine State Director, Noël Bonam, said.
"For older adults who are clipping coupons out of newspapers and are trying to watch every dollar that they spend that goes a long way," he said.
While this year's 3.2-percent increase is not even half of last years 8.7-percent increase, Bonam said having some sort of increase plays a large role in how people budget every month. Otherwise, a fixed benefit would only erode over time. Since 2000, the COLA has averaged about 2.7 percent a year, according to the SSA.
"If the cost of living adjustments don't keep up with inflation, then they'll really have to make tough decisions on a daily basis. Trying to decide between on how much to spend on medications or how much medications they can take," Bonam said.
While most workers pay a tax to help fund Social Security, the 6.2 percent social security tax rate is not being adjusted, according to the SSA. Rather, the threshold to tax a maximum amount of earnings is changing. Now, the agency will tax people who earn an income of $168,600, increasing the 2023 threshold from $160,200.
While Americans will see the increase in benefits, Medicare Part B premiums will slightly shave off some money every month. The monthly Medicare Part B premium will increase this year by $9.80, which will automatically deduct from the Social Security payments, according to Centers for Medicare & Medicade Services.
Click here to learn more about Social Security benefit payments.