As with every year, a cost-of-living-adjustment (COLA) will be set next January for retired workers and families under the Social Security Administration. You can now gauge the extra money you will get for the next year as part of the COLA adjustments.
Social Security recipients are in line to receive an official confirmation of the revised amount of their monthly benefits from January next year. The benefits will see an increase of 3.2% from January thanks to the annual COLA adjustment.
But the COLA for 2024 will not be as generous as the increase that people got in 2023. This is due to the high inflation rate during that period. The benefits will be up by 3.2% for 2024 with COLA. This will result in an increase in the region of $50 every month for beneficiaries. This was revealed by the Social Security Administration.
2023 Cola Adjustment Was Much Higher Compared To 2024
The COLA increase announced by the Social Security Administration is way less than the 8.7% those beneficiaries received starting January 2023. That led to a spike in benefits in the region of $140 for retired workers and other Social Security beneficiaries.
The amount will vary for individual beneficiaries depending on several other factors. The amount that beneficiaries pay for Medicare premiums (Part B) is deducted directly in most cases from the Social Security payments. There may also be tax withholding depending on the earnings of the beneficiaries from other sources.
Tax is payable to Social Security benefits only if there are other sources of income that push the combined earnings above the present low threshold when taxes kick in. but there are ways that beneficiaries use to limit the amount of tax they pay to the Social Security benefits. They include withdrawing taxable income before they retire, purchasing an annuity, and putting a limit on the amount they save in Social Security.