Market Update | October 24, 2023

The Social Security Administration recently announced that over 71 million Americans, including Social Security and Supplemental Security Income beneficiaries, will receive a 3.2% increase in their benefits for 2024.

However, it is crucial to consider the impact of Medicare Part B premiums on the overall increase in Social Security benefits. Typically, Medicare Part B premiums are deducted directly from Social Security checks. The Medicare trustees just announced that the average monthly premium for Medicare Part B will increase by 5.9% to $174.70 in 2024, up from $164.90 in 2023. The annual deductible for all Medicare Part B beneficiaries will increase to $240 in 2024, $14 more than 2023’s annual deductible of $226.

Many retirees are still grappling with the effects of inflation. The Bureau of Labor Statistics has developed a research Consumer Price Index that attempts to capture the financial experience of older people by re-weighting the goods and services retirees consume. According to the St. Louis Federal Reserve, this number has seen an inflationary rise of 4.15% between August 2022 and August 2023.

While the 3.2% cost of living (COLA) increase for 2024 is a welcome development, it is vital to be aware of the impact of Medicare Part B premiums on the overall financial picture. Please reach out you have questions about the Social Security 2024 COLA or your retirement income planning more broadly.

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