Average Social Security retirement benefit may grow by some $57 per month in 2024, new estimate finds

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According to Mary Johnson, Social Security and Medicare policy analyst at The Senior Citizens League, this is lower than the $1,837 average monthly retirement benefit cited by the Social Security Administration, because it includes spousal and other dependent benefits, in addition to those of workers. The projected Social Security COLA of 3.2% for 2024 is significantly lower than the 8.7% increase that beneficiaries experienced in 2023. But it is higher than the annual 2.6% average increase over the past 20 years, according to Johnson.

Before you factor in the impact the estimated 3.2% boost may have on your benefits in 2024, there are three things to keep in mind.

1. The Social Security Administration is expected to announce the official 2024 COLA in October.

This official calculation is based upon inflation data for the months of July, August and Septembre from the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).

The three month data will be averaged and compared to the third quarter average for 2022.

The total data will then be averaged and compared. If there is an increase, that determines the size of the COLA.

“At this point, there’s always a chance of inflation doing something totally unexpected,” Johnson said, which may affect the official benefit adjustment for 2024.

There is a 61% chance the COLA for 2024 will be 3.2%, according to Johnson.

Meanwhile, there is a 9% chance of it going higher and a 30% chance it may be lower, she said.

2. Medicare Part B premiums affect increases

Medicare Part B premiums are typically deducted directly from Social Security checks.

Consequently, the size of those premiums affects how much of the COLA beneficiaries may see.

Medicare Part B premium rates also change each year. The Medicare trustees have projected the average monthly premium may be $174.80 in 2024, up from $164.90 in 2023.

Certain factors, particularly a new Alzheimer’s drug, may affect costs and the size of the Part B premiums.

The Senior Citizens League estimates the Alzheimer’s treatment, Leqembi, may add $5 per month to the average monthly Medicare Part B premium next year.

Medicare Part B premium rates for the following year are typically announced in November.

3. Think twice before starting benefits this year

If you’re on the brink of claiming Social Security retirement benefits, you may be tempted to claim this year to get the record 8.7% boost for 2023.

But experts say that is a misguided strategy.

“You don’t have to start now to get the benefit of a cost-of-living adjustment,” Bruce Tannahill, a director of estate and business planning at MassMutual, recently told CNBC.com.

Nobody’s getting rich from the 8.7% COLA.

Mary Johnson

Social Security and Medicare policy analyst at The Senior Citizens League

“Social Security will adjust your projected benefits to reflect the cost-of-living adjustments that occur prior to the time that you retire,” he said.

Instead, it’s best to prioritize finding a claiming strategy that fits your circumstances and will maximize your monthly benefit income.

Even as the inflation rate has come down, current Social Security beneficiaries are still struggling with higher prices due to inflation, particularly when it comes to housing, food and medical costs, which make up about 80% of retiree spending, according to Johnson.

“Nobody’s out of the woods,” Johnson said. Mary Johnson

Social Security and Medicare policy analyst at The Senior Citizens League

“Social Security will adjust your projected benefits to reflect the cost-of-living adjustments that occur prior to the time that you retire,” he said.

Instead, it’s best to prioritize finding a claiming strategy that fits your circumstances and will maximize monthly benefit income.

Even though inflation has decreased, current Social Security beneficiaries are still struggling with higher prices due. “