The average retiree will see a $59 increase in their monthly Social Security benefit this year. Benefits going to the typical American went from $1,847 to $1,906 as a result of a 3.2% cost-of-living adjustment.
If you're wondering how your own benefits increase compares to what the typical senior got, here's what you need to know.
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This is how to calculate your own COLA
The amount of your cost-of-living adjustment (COLA) is going to be based on the income you already had coming in from Social Security.
The simplest way to estimate your raise is to just multiply the benefit amount that you were getting by the 3.2% COLA that took effect this year. So, if you were receiving $1,500 a month, for example, multiplying that by 3.2% would give you a benefit bump of around $48 a month.
Once you have calculated how much bigger your benefit is going to be, you need to take into account the fact that Medicare premiums also rose in 2024. Monthly premiums went from $164.90 in 2023 to $174.70 in 2024.
Most people have Medicare premiums withdrawn from their Social Security checks, so this means that your raise will be reduced by the extra $9.80 a month that you have to pay for Medicare Part B insurance.
As you can see, your benefits bump isn't a big one this year. But it does mean that you have a little bit of extra money to help you keep up with rising prices.
Why is your raise bigger or smaller than the average American's?
While the average American got a $59-per-month raise in 2024, your raise may be bigger or smaller, since your payment is based on the income you already had coming in.
If you made a good amount of money during your career, or increased the amount of your benefit by delaying your Social Security claim, your monthly Social Security check may be larger than the average American's. And, since the raise is applied on a percentage basis, those who get a bigger benefit will see their income increase by more each year when there is a cost-of-living adjustment.
The important thing to remember, though, is that everyone gets the same percentage increase -- and, that no matter how big or small your raise seems on paper, it's not likely to actually leave you with extra income to spend. That's because it's not designed to. It's calculated based on how much prices rose on a consumer price index, and it's meant to help you keep pace with increasing costs due to inflation, rather than to provide you with more buying power.
Unfortunately, because the formula used to calculate COLAs is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers, the raises you're getting may not actually be doing a good job keeping pace with inflation. In fact, the Senior Citizens League estimates that Social Security benefits have lost about 40% of their buying power since 2000.
So, whether you got more or less than the $59 monthly raise the average retiree got this year, remember that you still need to be smart about your spending, so you can make your benefits stretch to cover the costs you'll incur throughout the year.
