The Social Security cost-of-living adjustment (COLA) for 2024 has been announced, with a 3.2% increase benefiting the program’s 66 million beneficiaries. This COLA adjustment aims to counteract the impact of inflation, ensuring that Social Security benefits maintain their purchasing power. Here’s a breakdown of the 2024 COLA and how it affects retired-worker benefits in different states:
Key Points:
- COLA Mechanism: Social Security’s COLA is calculated based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), using data from the third quarter of the current and preceding years.
- 2024 COLA: The 2024 COLA is set at 3.2%, providing a monthly increase in benefits. This is a notable decrease from the 8.7% COLA granted in 2023 but still higher than the 2.6% average observed over the past two decades.
- Impact on Retired Workers: The typical retired worker will see a 3.2% COLA, resulting in a $59 monthly increase, bringing their estimated January 2024 check to $1,907.
Top 10 States with the Highest Increase:
- Connecticut: $2,020.41 ($64.65 increase expected)
- New Jersey: $2,020.14 ($64.64 increase expected)
- Delaware: $1,998.21 ($63.94 increase expected)
- New Hampshire: $1,994.48 ($63.82 increase expected)
- Maryland: $1,960.40 ($62.73 increase expected)
- Washington: $1,933.04 ($61.86 increase expected)
- Minnesota: $1,924.20 ($61.57 increase expected)
- Michigan: $1,917.84 ($61.37 increase expected)
- Massachusetts: $1,910.33 ($61.13 increase expected)
- Utah: $1,900.65 ($60.82 increase expected)
Factors Influencing State Variations:
- Earnings History: A worker’s earnings history significantly influences Social Security benefits. States with higher average annual wages tend to have larger Social Security checks.
- Full Retirement Age and Claiming Age: The full retirement age and the age at which a beneficiary chooses to claim Social Security also impact benefit amounts. Delaying claims results in increased monthly benefits.
- Cost of Living: States with a lower cost of living, like Michigan, can make Social Security dollars go further in retirement.
- Retiree Migration: The migration of retirees to more affordable states might explain variations in benefit amounts.
Understanding the factors influencing Social Security benefits helps retirees make informed decisions about their financial well-being in retirement.
