While Social Security recipients in the U.S. will see a cost-of-living (COLA) increase to the benefits next year, it will be significantly lower than this year’s 8.7% spike.
Social Security benefits are offered to senior citizens and people with disabilities. The Social Security also provides help for Americans who have experienced a family death and divorce.
In a Thursday press release, the administration said 71 million Americans will see a 3.2% increase in their benefits next year. With this increase checks will be, on average, more than $50 higher than in 2023.
Of those 71 million recipients, 66 million will see the increase kick in during the first month of 2024. Around 7.5 million people who receive Supplemental Security Income will see an increase kick in this December.
“Some other adjustments that take effect in January of each year are based on the increase in average wages,” said the press release. “Based on that increase, the maximum amount of earnings subject to the Social Security tax (taxable maximum) will increase to $168,600 from $160,200.”
For self-employed people, the 2024 tax rate is 15.3% and for employees it is 7.65%.
According to the Associated Press, last year’s nearly 9% increase was fueled by high inflation. While inflation remains high, the Federal Reserve Bank has tried to tame it with high interest rates, which make it more expensive for people to borrow money.
Currently, Americans who have paid in to Social Security can apply for benefits starting at age 62. However, some Republican lawmakers have proposed increasing the age – something a majority of Americans are opposed to.
Social Security benefits are also paid out even in the case of a government shutdown, something the nation has been on the brink on multiple times recently.