Soaring prices of goods across the globe, including the United States, have many Americans worried about making ends meet, particularly those on low incomes. Fortunately, Social Security offers a safety net, adjusting payment levels annually to shield recipients from rising costs. This annual adjustment, known as the Cost-of-Living Adjustment (COLA), ensures that benefits keep pace with inflation, helping to maintain purchasing power.
The Social Security Administration (SSA) recently announced a 3.2% increase in monthly Social Security Disability Insurance (SSDI) payments for 2024. This COLA adjustment will take effect for Social Security recipients in January 2024 and for Supplemental Security Income (SSI) users from December 29, 2023, and on.
The New SSDI Amounts During 2024 Fiscal Year
While this increase marks a welcome bump in benefits, it’s a more modest adjustment compared to the hefty 5.9% and 8.7% hikes witnessed in the previous two years. Those earlier increases, the largest since the early 1980s, were a direct response to surging inflation. Nonetheless, even with the smaller COLA adjustment for 2024, Social Security beneficiaries will receive some much-needed support to navigate rising living expenses.
It’s worth noting that the current 3.2% COLA still surpasses the average annual adjustment of 2.6% experienced over the past two decades. The annual adjustment is calculated based on inflation data from August through October, reflecting a downward trend compared to the near four-decade highs seen in the previous year.
The Average and Maximum SSDI Payments
In October of 2023, the typical monthly disability payment through Social Security amounted to $1,665.14. The benefits provided by SSDI primarily hinge on the individual’s prior earnings and the corresponding Social Security taxes paid.
As of 2023, the highest monthly SSDI benefit stands at $3,627, with an increase to $3,822 in 2024.
Due to regional differences in the cost of living and the fact that an individual’s SSDI payment is influenced by their lifetime earnings, among other factors, the average monthly SSDI benefit fluctuates across states. In the year 2022, Delaware boasted the highest average monthly SSDI payment, reaching $1,599.97, while the District of Columbia reported the lowest at $1,321.04.
How Are SSDI Benefits Calculated Every Year?
Your SSDI benefits won’t change based on how severe your disability is. So, don’t worry about waiting until things get worse – it won’t boost your monthly benefits.
Here’s how it works: The Social Security Administration takes your past earnings, adjusts them for inflation, and figures out the average from your 35 best-earning years. Then, they use “bend point” percentages on different parts of that average. Adding up these bend points gives you your primary insurance amount (PIA). It’s like piecing together a puzzle to find out your benefit amount!
The bend points for 2024 are:
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90% of the first $1,174.
32% of any amount between $1,174 and $7,078.
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15% of any amount above $7,078.
Your PIA is the amount you’ll receive each month if you qualify for SSDI benefits.