Command Sgt. Maj. Michael Grunst salutes during his retirement ceremony July 21, 2023, at Camp Carroll on Joint Base Elmendorf-Richardson in Alaska. (Robert DeBerry/Alaska National Guard)
WASHINGTON – Retired military service members and disabled veterans will see a smaller cost-of-living increase in their benefits payments in January due to slowing inflation across the United States, federal officials said.
The Social Security Administration said its annual benefits increase, which occurs at the start of each year and is formally known as the cost-of-living adjustment, or COLA, will be 3.2% for 2024. The federal retirement and disability systems that pay benefits to veterans are required by law to make cost-of-living increases at the same rate.
The purpose of the cost-of-living increases each year is to help recipients withstand inflation.
“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,” AARP CEO Jo Ann Jenkins said of the coming COLA hike. “We know older Americans are still feeling the sting when they buy groceries and gas, making every dollar important.”
The coming increase is far lower than the 8.7% hike that recipients got for 2023 and the 5.9% that they saw in 2022, both of which were higher because of the higher inflation that came after the coronavirus pandemic. The increase means most retired veterans will see an extra $32 for every $1,000 in pension payments that they receive monthly.
“On average, Social Security retirement benefits will increase by more than $50 per month,” the Social Security Administration said in a statement.
Officials said the increase applies to Social Security and Supplemental Security Income benefits and will affect more than 70 million Americans.
The most recent Consumer Price Index, one of the top federal measures for inflation, showed a rise in prices of 3.7% in the past year. By comparison, that figure, which measures price trends in sliding 12-month windows, was more than 9% in mid-2022 during the pandemic. While inflation is still above the Federal Reserve’s target of 2%, it’s much lower than in recent years.
The Social Security Administration said the comparatively smaller raise, however, will be enough for most recipients.
“This will help millions of people keep up with expenses,” acting Commissioner Kilolo Kijakazi said.
Apart from 2022 and 2023, the 3.2% COLA increase for next year will be the highest since 2011, when the United States was rebounding from the Great Recession. The average COLA increase between 2012 and 2020 was 1.4%, and the average for the past 20 years is roughly 2.5%.
Earlier this year, Congress passed the Veterans Compensation COLA Act, which requires the Department of Veterans Affairs to make the same cost-of-living raise as the Social Security Administration. The VA pays out benefits for service-disabled veterans and the families of fallen service members.
“At a time when folks are struggling with rising costs, from housing to groceries, veterans deserve absolute certainty when it comes to providing for their families,” said Sen. Jon Tester, D-Mont., chairman of the Senate Committee on Veterans’ Affairs.
The Senior Citizens League, an advocacy group, had predicted a 3.2% increase for 2024.
“A COLA of 3.2% would raise an average monthly retiree benefit of $1,790 by $57.30,” the group said last month in its projection.
Congress has about a month left to authorize full government funding for 2024 under a temporary spending measure that lawmakers approved two weeks ago. While some staffers at the Social Security Administration could be furloughed if more funding is not passed and the government shuts down, benefits payments to military retirees and other recipients would not be affected.
