• The 2024 cost-of-living adjustment (COLA) for Social Security benefits will be 3.2%. Although considerably lower than the last two years, this year's increase is above the 20-year average of 2.6% and in line with expectations*. The COLA is based on the rate of inflation (specifically, the CPI-W), and the last two years saw outsized COLAs due to significant spikes in inflation that resulted from several unusual factors. The 2024 increase is a return to a more normalized adjustment and reflects a general slowdown in price increases.
  • Although a smaller bump this year, this boost in benefits can help retirees better meet their day-to-day needs given rising inflation. It may even allow them to reduce how much they need to withdraw from their investment portfolios, and such a reduction can be especially beneficial in down markets. How much you withdraw from your investment portfolio each year plays the biggest role in helping ensure your money lasts through retirement. Small adjustments, such as reducing your withdrawals during down markets, can have a meaningful impact on your portfolio's longevity.
  • Social Security recipients could also put those extra dollars toward their cash reserves. We generally recommend retirees maintain about one year's worth of spending needed from their investment portfolio in cash and an additional three to six months' spending in an emergency fund. Additionally, we recommend having another three to five years' worth of spending needed from their investment portfolio in short-term fixed-income investments, which are now offering better income opportunities given multiple interest-rate hikes.
  • In addition to the COLA, Social Security also made its annual adjustments in other items for 2024, including the maximum taxable earnings amount ($168,600) and the earnings limit for retirees who file before reaching full retirement age ($22,320 for years before reaching full retirement age, $59,520 for the year a retiree reaches full retirement age).
Social Security Cost-of-Living Adjustments Source: Social Security Administration

*Social Security Administration government website has additional information that you may find useful.  Go to: Social Security Changes - COLA Fact Sheet (ssa.gov). This information is provided as a courtesy and is intended for informational purposes only. Edward Jones makes no representations concerning the content of this site.

Katherine Tierney's head shot

Katherine Tierney

Senior Strategist, Retirement

CFA®, CFP®

Katherine Tierney is a Senior Retirement Strategist on the Client Needs Research team at Edward Jones. The Client Needs Research team develops and communicates advice and guidance for client needs, including retirement, education, preparing for the unexpected and leaving a legacy. Katherine has more than 15 years of financial services and retirement experience. She is a contributor to Edward Jones Perspectives and has been quoted in various publications.

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