What to Do with the COLA 2024 Increase: Those who are retired and enrolled in Social Security may be curious about the potential impact of the forthcoming cost-of-living adjustment (COLA) on their income. The COLA is an annual adjustment implemented by the Social Security Administration in order to account for inflation and price changes.
What to Do with the COLA 2024 Increase?
The COLA reached 8.7% in 2023, its greatest level in more than four decades. This equated to a $174 monthly increase for Social Security recipients who received $2,000. However, the COLA for 2024 may be lower, with projections placing it at 3.2%.
We are days away from the Social Security Administration announcing just how big cost-of-living adjustments will be next year for millions of retirees. Here’s why hikes likely won’t be as high as last year. https://t.co/urMnq81Zsg
— Scripps News (@scrippsnews) October 6, 2023
Any modification in payments affords individuals with a fixed income the chance to reassess their monthly budget. It is critical to contemplate the optimal utilization of the additional funds resulting from the Social Security COLA in 2024. The following are some suggestions:
1. Provide for living expenses: Establish a reliable source of income to ensure that your daily expenses are adequately covered.
2. Prioritize the repayment of debts carrying the highest interest rates in order to enhance overall financial stability and thereby eliminate any outstanding debt.
3. Save and invest in the future: It is advisable to strive towards amassing three to six months’ worth of expenditures as an initial objective. The additional funds saved for a rainy day can be utilized to combat future inflation.
4. Invest more in your health and well-being: Allocate a portion of the additional funds to health and well-being improvements, such as purchasing exercise equipment or enrolling in a gym.
5. Benefit from minor indulgences: Indulge in an indulgent weekend getaway or a fine dining experience that was previously out of your price range.
6. Reward those who have assisted you: In the event that you have received support from organizations or individuals throughout your retirement, contemplate reciprocating their generosity as a gesture of gratitude.
Additionally, financial experts advise that you investigate various account varieties for your emergency fund. Depending on your immediate requirements, high-yield CDs, Treasury inflation-protected securities (TIPS), and multiyear guaranteed annuities (MYGAs) are all feasible alternatives. Financial security and a sense of relief can be derived from these accounts.
The Social Security cost-of-living adjustment for 2024 is forecast to be 3.2 percent, far below the 8.7 percent increase that older Americans received this year. https://t.co/IHvigVvi5P
— DealBook (@dealbook) October 7, 2023
Prioritizing your requirements and conducting a thorough analysis of your financial situation are, in general, crucial. As advised by Brandon Robinson, president and proprietor of JBR Associates, “Ensure that a guaranteed income stream is sufficient to cover your daily expenses.” You can optimize your financial security in retirement and take advantage of the Social Security COLA by exercising prudence in your discretionary income.
