Retirees, mark your calendars for October 12th! This day is considered the most important day of the year for Social Security recipients.
On this day, the Social Security Administration announces the cost-of-living adjustment (COLA) for the following year. The COLA is an increase in Social Security benefits to help recipients keep up with inflation. It is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).
The announcement of the COLA is eagerly awaited by retirees, as it determines the amount of their monthly benefit increase. In recent years, the COLA has ranged from 0.3% to 2.8%.
Retirees rely on Social Security benefits to cover their living expenses, so any increase in the COLA is significant. It can help offset rising costs of healthcare, housing, and other essential needs.
It's important for retirees to stay informed about the COLA announcement on October 12th. They can check the Social Security Administration's website or contact their local Social Security office for more information.
Retirement planning is a crucial aspect of financial security, and staying updated on Social Security benefits is a key part of that. By knowing the COLA for the upcoming year, retirees can better plan their budgets and make informed decisions about their retirement finances.
So mark your calendars, retirees! October 12th is a day that can have a significant impact on your financial well-being.
The 2024 COLA is estimated to be 3.2 percent, and it will affect various programs that receive monthly payments from the Social Security Administration. These programs include Social Security, Supplemental Security Income, Disability Insurance Benefits, clothing subsidies for eligible veterans, Dependency and Indemnity Compensation for veteran survivors, SNAP benefits, military pensions and disability payments, and government pensions. The COLA is calculated based on the Consumer Price Index for Salaried Workers in Urban Areas and Administrative Workers. The first beneficiaries to see the COLA applied are those who receive Supplemental Security Income, and Social Security beneficiaries will see their first checks with the COLA applied in January.
However, while the 2024 COLA adjustment is welcome news for many seniors, it could lead to a negative tax surprise for some. Social Security beneficiaries will see a 3.2% COLA adjustment in 2024, compared to the past adjustments of 8.7% in 2022 and 3.2% in 2023. With inflation starting to level out, next year's COLA adjustment will be on par with the adjustment in 2023.
The concern arises from the fact that some Social Security recipients may be pushed into a higher tax bracket as a result of the COLA increase. This means that their Social Security benefits could be subject to higher taxes, potentially leading to a negative tax surprise.
It is important for seniors to be aware of this potential tax impact and plan accordingly. They may need to consult with a tax professional or financial advisor to understand how the COLA adjustment could affect their overall tax situation.
While the 2024 COLA adjustment is intended to help seniors keep up with inflation, it is crucial for them to consider the potential tax implications and make informed decisions about their finances.
Source: The Washington Post [9582dac4]
Source: The Gazette [a2359d66]
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