What Retirees Need To Know About Social Security Cost Of Living Adjustment
The Social Security Administration’s annual cost of living adjustment is expected to be less than previously thought.
Social Security and Supplemental Security Income (SSI) recipients should keep their eye on a lower increase than the 8.7% adjustment received in 2023, The Hill reports. The Cost of Living Adjustments, also known as COLA, was designed to help social security and SSI recipients keep their money afloat against rising inflation costs. The increases are determined by the Bureau of Labor’s Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W, which is how the change in regular consumer goods and services is measured.
The actual COLA is scheduled to be published on Oct. 12, and the Senior Citizens League (TSCL), a nonpartisan senior advocacy group, estimates it will be close to 3.2%. Although it’s lower than both 2023’s and 2022’s 5.9% increase, the increase in 2024 is set to be one of the largest in more than 10 years.
The group warns that the increase still won’t be enough to maintain the cost of living for beneficiaries. “Because retiree costs are rising at a far more rapid pace than the COLA raises benefits, this study found that a SS benefit of $1,969.80 per month in 2023 would have been required,” the league wrote.
According to data from a Centers for Medicare & Medicaid Services report, TSCL expects Medicare Part B premiums, which are automatically subtracted from SS checks, to go up from $164.90 to a little less than $180.
Inflation is a harsh reality for beneficiaries. Mary Johnson, TSCL’s research analyst, says that increases aren’t always good news for recipients.
“Nobody is getting rich,” Johnson said, according to Fox Business. “The reality is that the dollar amount of the COLA increase received is meager at best, with the average monthly retiree benefit only $1,790 in 2023.”
Johnson said that the SS system can be a lose-lose situation, as higher SS payments reduce eligibility for programs like food stamps and push people into higher tax brackets, causing retirees to pay more taxes on their monthly payments. The group is pushing for Congress to create legislation that would put a cap on the inflation adjustment specifically for senior citizens.