On October 12, the final numbers were released for 2024. Here they are:
Social Security Cost of Living Adjustment (COLA)
Social Security beneficiaries will receive a 3.2% raise in 2024. This translates to an additional $59 per month for the typical beneficiary. It is significantly lower than last year’s 8.7% COLA, reflecting this year’s slowing inflation.
The taxable maximum on earnings next year will increase to $168,600, up from $160,200. Beneficiaries will be notified by mail in December as to the exact increase. You can view your COLA online if you have a My Social Security account. Click here to set up an account.
Any raise in benefits is certainly welcome. That said, since 2000 Social Security benefits have lost 36% of their actual buying power, despite annual cost of living adjustments. The Senior Citizens League notes that out of of 2,258 seniors it recently polled, 68% report that their household expenses are at least 10% higher than a year ago, even with inflation tapering off. The disparity between Social Security COLA and the reality of seniors’ expenses illustrates what some advocacy groups have long suggested: COLA should be tied not to the Consumer Price Index as it is now, but instead to the Consumer Price Index for the Elderly, or CPI-E. The latter is an index introduced in 1983 that gives gives greater weight to the typical expenses of seniors, such as health care.
Medicare B premiums are typically deducted from monthly Social Security benefits. Therefore, if you are on Medicare, you need to know the new Medicare B figures to determine just how far “ahead” the Social Security increase actually puts you.
In 2024, the standard Medicare Part B premium will increase to $174.70, up from $164.90 in 2023. This represents an increase of about 6%, less than many had feared.
Medicare Part B premiums include a surcharge for those with high incomes. The surcharge is known as the “income related monthly adjustment amount” or IRMAA. It is calculated each year based on your adjusted gross income from two years prior. Thus, your IRMAA in 2024 is based on your tax filings of 2022. In 2024, individuals with adjusted gross income over $103,000 will pay an IRMAA surcharge, up from $97,000 in 2023. Married couples with income over $206,000 will owe a surcharge, up from $194,000 in 2023.
The Part B annual deductible will also increase in 2024: $240, up from $226 in 2023.
Those with Medicare Part D coverage are also covered by IRMAA. And costs for Medicare Part A, basic hospital coverage, will also increase in 2024. For example, the inpatient hospital deductible will rise to $1,632 in 2024, up from $1,600 in 2023.