Social Security beneficiaries are set to receive a more modest cost-of-living adjustment (COLA) in 2024, according to estimates from the Senior Citizens League.
The nonprofit group projects that next year’s adjustment will be around 3%, which represents a significant drop from the 8.7% increase seen this year, per Fox 4.
COLAs have been enacted every year by the Social Security Administration (SSA) since 1975, per the SSA’s website. The adjustment aims to curb the effects of inflation by measuring the increase required using the consumer price index.
The CPI measures the price fluctuations of a broad basket of goods and services in the U.S.
The Senior Citizens League based its recent COLA estimates on inflationary and CPI data from March.
As The Dallas Express reported, inflation dropped for the ninth month in a row to 5%, while the CPI saw a very slight increase of 0.1%.
“If inflation continues to fall at the current rate, it appears that the COLA for 2024 will be lower than 3%,” Mary Johnson, a policy analyst at the Senior Citizens League, said, per Fox 4.
This would represent a significant drop from the 8.7% COLA seen in monthly Social Security benefits in 2023, which was the highest implemented in four decades.
The Senior Citizens League considers COLAs overall to be far too low, per its website.
They have been urging lawmakers to use an index specific to seniors, like the CPI-E, which follows the costs of those over age 62 and includes Medicare premiums.
The group estimates that a senior who filed for Social Security with average benefits three decades ago would have received nearly $14,000 more in retirement if the CPI-E had been used by the SSA.
While retirees represent the majority of Social Security beneficiaries (76.9% in 2022), disabled workers (11.6%) and surviving spouses of former workers (11.5%) also receive benefits, per the SSA.
Approximately 67 million Americans will receive monthly Social Security benefits this year, amounting to over one trillion dollars in benefits.
The SSA forecasts that by 2035, there will be 2.3 covered workers for each recipient of Social Security benefits, whereas there were approximately 2.8 covered workers per beneficiary in 2022.
If Social Security beneficiaries receive a 3% increase in their monthly checks next year, the average retiree benefit of $1,827 will increase by about $54 per month.
The Senior Citizens League claims this isn’t enough.
Between January 2021 and December 2022, the average Social Security benefit fell short of high inflation by about $1,054 in total.
This year’s 8.7% benefit increase has exceeded the actual rate of inflation every month in 2023 by about 2.6%, according to the group’s analysis. But average benefits have only recovered $179.40 since the start of the year.
“Although easing inflation should relieve older consumers, new survey findings from The Senior Citizens League indicate that recent steep inflation has had long-lasting financial impacts on many older households, making recovery difficult,” Johnson explained, per Fox 4.
The next COLA will be announced by the SSA this October, per its website.