Social Security benefits to rise 3.2 percent

Social Security benefits will increase by 3.2 percent in 2024, marking a much smaller cost-of-living adjustment than the past two years amid cooling inflation.

The boost will raise Social Security benefits for the more than 71 million Americans who receive them by about $50 a month on average, the Social Security Administration said in its announcement Thursday.

The cost-of-living adjustment is significantly smaller than this year’s historic increase of 8.7 percent, as well as the 5.9 percent increase in 2022, as inflation has eased after reaching record highs last summer.

Inflation peaked at a 40-year high of 9.1 percent last June. However, it has fallen significantly since, as the Federal Reserve has repeatedly raised interest rates in an effort to counteract rapidly rising consumer prices. 

In September, inflation held steady at 3.7 percent, according to Labor Department data released Thursday. This marks a significant decrease from last year’s peak but remains above the Fed’s target of 2 percent.

While the central bank decided not to raise interest rates in September, it has indicated that there could still be another rate hike before the end of the year. 

AARP CEO Jo Ann Jenkins praised the cost-of-living adjustment Thursday, emphasizing that it will help retirees “keep up with rising prices.”

“Retirees can rest a little easier at night knowing they will soon receive an increase in their Social Security checks to help them keep up with rising prices,” Jenkins said in a statement. “We know older Americans are still feeling the sting when they buy groceries and gas, making every dollar important.”

“Social Security has been the foundation for financial security for hundreds of millions of people in our nation — and today’s announcement shows that it’s continuing to deliver on this promise,” she added.

Updated at 10:26 a.m. ET