(The Center Square) – Social Security benefits will increase by 3.2 percent next year, a smaller bump than the previous two years from a federal program expected to fall short on funds for all beneficiaries by 2034.

Social Security and Supplemental Security Income benefits for about 71 million Americans will increase, on average, by more than $50 a month in 2024, the Social Security Administration announced Thursday. 

In March, the Social Security Administration reported that Social Security won’t have enough money to pay all beneficiaries the amount they are entitled to starting in 2034, a year earlier than previously expected as the program's benefits have grown faster than its income. At that time, the annual cost of the program was projected to exceed the annual income in 2023 and remain higher for the 75-year projection period. The total cost of the program started to eclipse income in 2021. Social Security's cost has exceeded its non-interest income since 2010, according to the Social Security Board of Trustees' annual report to Congress.

The 3.2 percent cost-of-living adjustment beginning in January is smaller than the 8.7 percent bump this year and the 5.9 percent increase in 2022. The average Social Security Old-Age and Survivors Insurance monthly benefit was $1,758, as of August 2023.

The Social Security Act ties the annual cost-of-living adjustment to the increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers as determined by the Department of Labor’s Bureau of Labor Statistics. The Consumer Price Index is a measure of inflation.

Inflation hit a 40-year high of 9.1 percent in June 2022. It has since cooled as the Federal Reserve has raised interest rates.

Also starting in January, the maximum amount of earnings subject to the Social Security tax will increase to $168,600 from $160,200 based on the increase in average wages.

The Social Security Board of Trustees in March asked Congress to address the "projected trust fund shortfalls in a timely fashion to phase in necessary changes gradually," Acting Commissioner of Social Security Kilolo Kijakazi said at the time.

Total income, including interest, to the combined Old-Age and Survivors Insurance and Disability Insurance Trust Funds was $1.222 trillion in 2022. Total expenditures from the combined trust funds were $1.244 trillion in 2022.

AARP Chief Executive Officer Jo Ann Jenkins said the increase will help retirees.

“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," she said in a statement. "We know older Americans are still feeling the sting when they buy groceries and gas, making every dollar important."

Jenkins also urged Congress to take action. 

"AARP is urging Congress to work in a bipartisan way to keep Social Security strong and to provide American workers and retirees with a long-term solution that both current and future retirees can count on," she said.