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Social Security Cost of Living Adjustment (COLA) Estimated to Rise to 3% in 2024

The Senior Citizens League predicts that the Social Security cost of living adjustment (COLA) for 2024 could see a significant rise, reaching up to 3%. This potential increase might boost the average monthly benefit of $1,787 by slightly over $53.60, according to the League’s estimate.

Despite this positive projection, the expected 3% bump would still be smaller compared to the substantial 8.7% spike that Social Security beneficiaries received in 2023, marking the highest increase in four decades.

The Senior Citizens League’s revision of its 2024 estimate follows the June report on The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), a crucial factor in determining the COLA to benefits. The CPI-W experienced a 2.3% year-over-year increase in June, leading the League to adjust its prediction from the initial 2.7% estimated in May.

However, a survey conducted by the Allianz Life Insurance Company of North America reveals that most Americans no longer depend solely on Social Security for their retirement. A staggering 74% of respondents stated that they could not rely on Social Security benefits to supplement their retirement income. Moreover, 88% of those surveyed believe it is essential to have another source of guaranteed income for a comfortable retirement.

The survey also indicates that 68% of Americans express interest in learning more about annuities as part of their retirement plans, suggesting a growing desire for alternative retirement income options. Allianz Life’s head of employer markets, Matt Gray, highlights the benefits of adding a guaranteed lifetime income option, such as an annuity, to retirement portfolios. In today’s economic environment, annuities can help mitigate risks and improve overall retirement outcomes.

Annuities serve as a means to convert investments into a steady stream of lifetime retirement income. They come in various types, including fixed annuities, which offer a set amount of interest on contributions regardless of market conditions, and variable annuities, where payments fluctuate based on the performance of investment options like mutual funds. Indexed annuities, on the other hand, provide payments linked to the performance of broad market indexes such as the S&P 500.

Despite their appeal, annuities are not without risk. The Securities and Exchange Commission (SEC) urges individuals to consider the financial strength of the insurance company issuing the annuity to ensure its stability during the payout phase.

In the pursuit of helping more Americans receive Supplemental Security Income (SSI), The Senior Citizens League has launched a new campaign. This initiative targets communities that witnessed the sharpest decline in SSI applications since the onset of the COVID-19 pandemic. These communities, primarily located in zip codes with a high percentage of residents living below the 150% federal poverty threshold, stand to benefit from this effort.

Social Security Acting Commissioner Kilolo Kijakazi emphasizes the core mission of Social Security, which includes assisting eligible individuals in accessing critical benefits like SSI. Underserved communities often face additional challenges such as limited internet and computer access, exacerbating the divide. The Senior Citizens League’s campaign aims to bridge this gap by utilizing multiple communication channels, including radio, television, and printed materials.

As retirement planning remains a priority for many Americans, the use of personal loans to pay off high-interest debt at lower rates could be a viable option. Platforms like Credible offer opportunities to compare loan options without impacting credit scores, enabling individuals to make informed financial decisions.

In conclusion, the potential 3% rise in the Social Security cost of living adjustment for 2024 brings hope to retirees, even though it falls short of the remarkable increase seen in 2023. While Social Security remains a significant part of retirement planning, a majority of Americans seek alternative sources of guaranteed income, showing increased interest in annuities. However, individuals are advised to carefully consider the risks associated with annuities and the financial stability of the insurance companies offering them. Moreover, efforts to extend Supplemental Security Income (SSI) benefits to underserved communities are underway, aiming to provide crucial support during retirement. As individuals prepare for their golden years, exploring options like personal loans to manage high-interest debt may prove beneficial in securing a stable financial future.

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