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When Does Social Security Increase?


Every year, the Social Security Administration (SSA) issues what is known as the Cost of Living Adjustment, or COLA. This is an annual increase intended to keep Social Security benefits in line with inflation. This increase is announced in October of each year and applies to all benefits starting in January of the following year. For 2024, the SSA announced a 3.2% COLA in October 2023. This increase applied to all Social Security and SSI (Supplemental Security Income) benefits starting January 2024. Here’s what you need to know.

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What Is the Cost of Living Adjustment?

The Cost of Living Adjustment, or COLA, is a program that keeps Social Security benefits in line with inflation. 

Even at the Federal Reserve’s target rate of 2%, average prices generally double approximately every 35 years. For a retiree, this can make entirely fixed incomes very dangerous. An income that doesn’t increase over time will lose its purchasing power a little bit each year. This can mean losing your standard of living by inches over the course of a standard retirement. That’s why many seniors supplement it with pensions and annuities. 

The COLA addresses that, at least in the context of Social Security. Every year, the SSA takes a 12-month average of the CPI-W (the Consumer Price Index for Urban Wage Earners and Clerical Workers) since the last COLA was measured. It uses this average as a representative metric of inflation nationwide. This calculated value becomes the increase for Social Security in the coming year, to make sure that a recipient’s spending power remains consistent with inflation.

For example, in fiscal year 2023, the CPI-W’s 12-month average was 3.2%. This means that inflation averaged about 3.2% (using this measurement) over the previous year, so Social Security benefits increased by the same amount starting in 2024.

When Do Social Security Benefits Increase?

A senior couple reading a COLA increase announcement from the Social Security Administration.

The SSA announces its COLA increase in October of each year. It then applies this adjustment starting with the first series of benefit payments issued in January of the following year. 

So, in 2024, the SSA announced a 3.2% increase on October 12, 2023. This increase was applied beginning with payments issued on January 3, 2024, the first series issued in 2024. These increases apply to all payments for the coming year. In October, the SSA will announce its new COLA, and a new increase will apply in the following January.

Benefit increases will fluctuate from year to year. This can give the impression that the SSA has variability or delays to its process. For example, in 2009, 2010 and 2015, low inflation led to a 0.0% COLA. This can give the impression that the SSA skipped its annual benefits increase, when in reality it followed the annual practice of adjusting benefits for inflation, which here was zero. 

Bottom Line

A senior estimating whether a Social Security increase will help her keep in line with inflation. 

Each year the Social Security Administration increases benefits in the annual COLA process. This adjustment is announced in October, then applied in January of the following year.

Social Security Tips

  • Social Security is essential for many retirees. In fact, it forms the backbone of the average retirement strategy. Here are 10 strategies to make maximize your benefits.
  • A financial advisor can help you build a comprehensive retirement plan. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.

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