Important Points
- A larger payment to Social Security claimants in 2024 is the result of the most recent cost-of-living adjustment.
- The reduction in early claiming benefits will result in a slightly lesser gain for claimants who are 62 years of age.
- All recipients will get COLA letters from the Social Security Administration this month.
- The $21,756 Social Security benefit that most retirees never even consider.
The earliest age to file for Social Security benefits, 62, is also the most common. A quarter of all seniors decide to sign up in order to receive the greatest number of checks. But there is a price for doing this. Your monthly benefit decreases if you file a claim early. Additionally, because COLAs are based on a portion of your benefit, they are less.
Fortunately, the COLA for 2024 will shortly provide much-needed support for all seniors. Discover what the earliest claimants can anticipate and what to do if you think your Social Security benefits are insufficient by reading the information below.
Before beneficiaries receive their first checks for 2024 next month, the Social Security Administration will send out COLA notifications to all of them throughout the month outlining their precise benefit increases. If you have a Social Security account, you can use it to access your COLA notice as well.
In case you’re not aware, the government determines your new benefit by deducting your main insurance amount (PIA) from the yearly COLA, which is set at 3.2% for 2024. If you had enrolled at your full retirement age (FRA), which for modern workers is between 66 and 67, you would have been eligible for this payment.
For those who filed their claims early, the government then does further computations to figure out how much of your new PIA should be subtracted in order to arrive at your benefit amount for 2024. However, you don’t have to comprehend how that operates. By increasing your 2023 benefit by 3.2%, you can get an estimate of your 2024 benefit. Additionally, one may predict the amount that the average 62-year-old will receive in 2024 using the same methodology.
Your main insurance amount (PIA) is determined by the government using the Social Security benefits formula. If you enroll at your full retirement age (FRA), you are eligible for that benefit. For those who were born in 1960 or later, this is 67.
The government must determine your average indexed monthly earnings (AIME) before it can use the benefits formula. This represents your average monthly salary over the 35 years that you made the most money, adjusted for inflation. More on how to calculate it is covered below.
Your AIME is then included in the Social Security benefit calculation that was put in place the year you turned 62 by the government. What you get is your PIA. However, that’s not always equivalent to your reward each month.
The average benefit for a 62-year-old claimant, according to the most recent Social Security data, is $1,275 per month as of December 2022. However, that excludes the COLAs for 2023 and 2024.
Social Security experienced its highest COLA in forty years in 2023, at 8.7%. This resulted from the pandemic’s extraordinarily high inflation. You will receive an average of $1,386 per month for 2023 if you increase the $1,275 average benefit from December 2022 by 8.7%.
An additional 3.2% is added, and the estimated monthly cost for 62-year-olds in 2024 is $1,430. That’s a monthly gain of almost $44. It’s a little less than the typical Social Security beneficiary’s $59 monthly rise, but that makes sense when you take into account the benefit reduction for early claimants.
What should you do if your social security check won’t go far enough?
Even if you filed for Social Security early, you might end up with more than the amount estimated here. Throughout your working years, your benefit will be determined by your income, and top earners have the potential to surpass this average.
It’s normal to be concerned about whether your checks will cover as much in the future, even with the COLA. Many have advocated that the Consumer Price Index for the Elderly (CPI-E), rather than the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), should be used by the Social Security Administration to compute its COLAs.
In most years, a move such as this would result in higher COLAs. However, this can only be facilitated by the government.
For the time being, everyone must try their best to get by. Your personal savings or income from a job are excellent additions to your Social Security benefits. Additionally, find out what other government benefits you might be eligible for right now if those aren’t available or sufficient.
For instance, low-income seniors 65 and older, as well as the blind and crippled, might receive a monthly benefit from the Social Security Administration called Supplemental Security Income (SSI). Your state and income will determine how much your SSI check is worth. However, starting in 2024, the federal maximum benefit will be $943 for an individual and $1,415 for a couple.
Additionally, you might be eligible for Medicaid, which can help with medical expenses, or Supplemental Nutrition Assistance Program (SNAP) benefits, which can assist with grocery prices. To find out if your state or local government can help with expenses like housing or utilities, check with them as well.
After receiving your COLA letter, contact the Social Security Administration with any questions you may have regarding your Social Security payment. It can be reached via mail, phone, email, or in person at a nearby office.
