In 2024, over 71 million Americans will experience a 3.2% increase in their Social Security benefits, including payments for retired workers, survivors, and disability insurance (SSDI). The cost of living adjustment (COLA), calculated annually based on inflation, ensures the buying power of beneficiaries remains stable. This adjustment covers payments such as Supplemental Security Income (SSI).

The COLA was announced in mid-October, but beneficiaries have had to wait until it takes effect to see the increase reflected in their payments. Throughout December, the Social Security Administration (SSA) has been sending COLA notices to retirement, survivor and disability beneficiaries, SSI recipients, and representative payees. These notices indicate the new payment amounts that beneficiaries will start receiving in 2024.

The COLA comes into effect at the start of the new year, applying to Social Security and SSI payments for January 2024. This means that the first increased Social Security payments will be sent early in 2024.

The annual increase in the COLA is tied to the annual rise in the Consumer Price Index for Urban Wage Workers and Clerical Workers (CPI-W). This calculation uses CPI-W data from the third quarter of the previous year and compares it to data from the third quarter of the current year. If there is an annual increase in the CPI-W, the SSA raises Social Security payments by that percentage.