3 Factors That Will Influence the 2024 Social Security COLA

After a historic 8.7 percent Social Security COLA in 2023, many of you might be wondering what we can expect in 2024. Several factors will combine to determine that exact figure, which will be announced by the Social Security Administration in October. Here’s what we know so far…

Economic Recovery: As the global economy continues to recover from the impact of the COVID-19 pandemic, various sectors are regaining stability. A recovering economy may contribute to a moderate rise in inflation, potentially impacting the 2024 COLA.

Inflationary Pressures: The Federal Reserve’s monetary policy, government spending, and supply chain disruptions can all influence inflation rates. Though central banks attempt to control inflation, certain factors may be beyond their immediate control, impacting the COLA calculation.

Cost of Essential Goods and Services: The prices of essential goods and services, such as housing, healthcare, and fuel, play a significant role in the COLA calculation. Any significant changes in these sectors could sway the final COLA figure.

For Social Security beneficiaries, the 2024 COLA can have both positive and negative implications. A moderate COLA, in the range of 2.0% to 3.0%, could offer some relief to retirees and disabled individuals by helping them keep pace with inflation. This would allow beneficiaries to maintain their standard of living and mitigate the impact of rising costs.

However, it’s important to remember that inflation can affect different demographic groups unequally. Seniors and individuals with fixed incomes may feel the pinch of rising prices more acutely, particularly if they heavily rely on Social Security benefits to cover their daily expenses.

The projected moderate increase of 2.0% to 3.0% could provide some relief, but it may not fully offset the rising costs of essential goods and services.

Ultimately, maintaining financial security in retirement relies on careful budgeting, prudent investments, and awareness of economic trends. By staying informed and planning ahead, Social Security beneficiaries can better navigate the ever-changing financial landscape and make informed decisions to secure their future. Remember to schedule regular meetings with us to update your retirement plan.

About the Author: Mark Roberts

In addition to managing clients’ money and giving investment and diversification advice, Mark offers something that “the other guys” don’t - a unique approach to Retirement Tax Strategies and distribution. Time and time again, Mark meets with new clients who tell him they have a great relationship with their financial advisor but have never been offered information on this kind of approach to securing their financial futures. Mark has taken this feedback to heart and works tirelessly to ensure that his strategies focus on taxes and distribution. Mark started selling insurance for a major insurance company right out of high school to help put himself through college. After graduating with a degree in finance, he dove into estate planning on the financial side to set himself apart from other financial advisors. However, as changes were made to estate tax laws over time, Mark shifted his focus to income tax strategies. Mark’s philosophy is “the blue prints are more important than the wall paper or carpet.” The wall paper and carpet represent products like investments and insurance policies, whereas the blue prints represent the strategies. Once strategies that truly fit the client’s needs are put in place, our focus can shift to providing you with the right products. According to Mark, “It doesn’t matter what carpet we use if the walls are not in the right place.” Our approach to money management is designed to generate the largest alpha (quality) with the lowest standard deviation and beta (risk). By doing this, we help provide clients with the highest return on the lowest risk. Generating income for our retirees is also very important. Because withdrawing money from your portfolio hurts the account rather than helping it, our goal is to design income strategies to harm the portfolio the least making the money last longer.

3 Factors That Will Influence the 2024 Social Security COLA

3 Factors That Will Influence the 2024 Social Security COLA

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About the Author: Mark Roberts