Editor’s Note: After a long career in the data processing industry, Russell Gloor joined the Association of Mature American Citizens in 2013. Gloor received training from the National Social Security Association and was accredited by the NSSA® as a Social Security adviser in 2016. Currently part of the AMAC Foundation’s Social Security Advisory team, he annually counsels thousands of American seniors about their Social Security options. In addition to answering Social Security questions daily, he also authors the AMAC Foundation’s nationally syndicated weekly “Ask Rusty” advice column and has written three instructional books about Social Security.

Dear Rusty: What is the cost-of-living increase for 2024?

Dear Increase: Calls have already started coming in asking what the cost-of-living increase is going to be for 2024. When do I get the increase? There are news articles already making announcements of the current CPI, which is the CPI-U. This is the Consumer Price Index for All Urban Consumers, (U.S. city average). The CPI-U is used in federal legislation, such as the indexation of federal income tax brackets. Whereas the COLA increase for Social Security is based on the CPI-W – Consumer Price Index for Urban Wage Earners and Clerical Workers.

The CPI-U is currently 3.2%, whereas the CPI-W at this point is 2.6%. This is based on comparing July 2022 to July 2023. The COLA is based on the average growth of inflation between July, August and September of the prior year. This means the current CPI-W of 2.6% can go up or down when the average of those three months is determined. The COLA is announced around the middle of October and will be applied to your December Social Security payment you will receive in January each year. (There is not always a cost-of-living increase as was the case in 2010, 2011 and 2016.)

Due to the declining inflation rate most economists were predicting a 2024 COLA increase between 2.7% and 3%. Whatever the COLA increase, you also need to take the cost of Medicare Part B into consideration.

The COLA increase was announced by Social Security – a 3.2% increase.

According to Medicare.gov, the cost of Medicare Part B will be $174.70 each month.

You will receive the full COLA, but it will be reduced by any increase to Medicare Part B.

This article is intended for information purposes only and does not represent legal or financial guidance. It presents the opinions and interpretations of the AMAC Foundation’s staff, trained and accredited by the National Social Security Association. NSSA® and the AMAC Foundation and its staff are not affiliated with or endorsed by the Social Security Administration or any other governmental entity. To submit a question, visit the website (amacfoundation.org/programs/social-security-advisory) or email ssadvisor@amacfoundation.org.