WASHINGTON (NEXSTAR) — Soon, bigger paychecks will be going to millions of people who receive Social Security benefits.
The Social Security Administration announced that 2024's cost of living adjustment will be 3.2%.
Next year's 3.2% COLA is much smaller than the 8.7% bump in 2023, but experts say it's still higher than average.
Bankrate Analyst Mark Hamrick explains the annual adjustment is tied to inflation.
"A 3.2% increase is above the 20 year average of 2.6," Hamrick said. "This change amounts to an increase of about $50 a month."
Mary Johnson is an analyst with The Senior Citizens League. She expects this increase will make a difference.
"We are lucky we have the COLA," Johnson said. "That makes the third year in a row that we've received a higher than normal COLA. For that reason I think people can feel a little bit of relief."
But for people living on a fixed income, the COLA may not cover all of their rising costs. Johnson says seniors are seeing their monthly expenses grow beyond their Social Security payments.
"Household budgets had increased by more than that, so they're doubtful that this 3.2 is going to be enough," Johnson said.
There are also the unexpected costs.
"Sudden expenses, which include for example something very relevant to retirees, medical expense, can have really catastrophic impacts," Hamrick said.
He says this is the reality of Social Security.
"While it has sort of become the major fallback for many retirees, it's broadly insufficient for that," Hamrick said.
So, he advises younger Americans to start planning now.
"All of this is a call to action for Americans to do more to own their retirement savings," Hamrick said.
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