The economy is gnawing at the wallets of Americans, and even more so for those who rely on Social Security and Supplemental Security Income benefits.
Fortunately, the Social Security Administration announced in October an increase of benefits by 3.2% for more than 71 million Americans who receive Social Security and SSI benefits. In 2024, recipients can expect an additional $50 or more monthly.
“Social Security and SSI benefits will increase in 2024, and this will help millions of people keep up with expenses,” said Kilolo Kijakazi, acting commissioner of Social Security, in a statement.
Social Security is a federal retirement program that provides benefits and a source of income for eligible retired workers who are 65 or older. According to the administration, there are more than 66 million beneficiaries. Supplemental Security Income provides monthly payments for an estimated 7.5 million people with disabilities or low-income older adults.
“Almost every worker in the nation pays into it,” says Kathleen Romig, director of social security and disability policy at the Center on Budget and Policy Priorities. “They and their family members can get benefits based on those earnings during one of these circumstances — death, disability, or retirement.”
Some Americans receive both Social Security and SSI benefits. It’s the largest poverty-fighting benefit, Romig says, and without them, four in 10 Americans would live in poverty.
Approximately 7.7 million Black Americans receive Social Security, 2.5 million collect SSI, and around 1 million reap both, according to the Census Bureau. On average, Black men over 65 receive $14,918 a year, and Black women of the same age get $13,636 a year.
With rising rents and utilities and increases in the cost of food and transportation, more than $15,000 a year is needed to live on for many Americans.
The administration has implemented a cost-of-living adjustment, also known as a COLA, every year starting in 2016, ranging from 0.3% to 8.7% in 2022. The newest boost will take effect as early as Dec. 29, 2023 for SSI and January 2024 for Social Security.
The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the third quarter of the prior year compared to the corresponding quarter of the current year determines if there will be an increase. In this case, the administration used data from the late summer and fall of 2022 and compared it with the numbers from 2023.
“The cost-of-living adjustment maintains the purchasing power of those benefits,” Romig says. “That’s so important because other sources of retirement income are subject to either inflation risk or investment risk.”
Pensions do not increase with inflation, unlike these benefit programs. Other retirement vehicles like a 401(k) or Roth IRA use a mix of stocks and bonds that fluctuate daily based on market performance.
To see more money from these programs for Black Americans, ending institutional and systemic barriers in “education, employment, earnings, marriage, health, disability, and mortality would significantly increase annual and lifetime Social Security benefits for Black adults,” a report from the Urban Institute found.
While inflation is moving closer to pre-COVID-19 pandemic levels, it is still high enough for Americans to feel the effects, with some expense categories hit harder than others. “That’s why it is so valuable that Social Security and SSI benefits keep up with inflation,” Romig says. “So that people can stay on top of the rising prices of those basic things.”
