This announcement holds significant weight for over 66 million beneficiaries, with 80-90% relying on these monthly payouts to cover essential expenses.
On October 12, 2023, at 08:30 a.m. ET, the Social Security Administration (SSA) is set to unveil the anticipated Social Security’s Cost-of-Living Adjustment
Social Security’s Cost-of-Living Adjustment ensures that benefits keep pace with inflation, safeguarding purchasing power for recipients. Since 1975, the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) has been the yardstick for this adjustment.
The key data, CPI-W readings for the third quarter, becomes available on October 12, determining Social Security’s Cost-of-Living Adjustment for the upcoming year. If the current year’s Q3 average surpasses the previous year’s, beneficiaries can expect an increase. In 2023, there was an 8.7% Social Security’s Cost-of-Living Adjustment, the largest in 41 years, resulting in a $146 monthly boost for the average retiree.
Senior Social Security policy analyst at The Senior Citizens League, Mary Johnson, projects a 3.2% Social Security’s Cost-of-Living Adjustment for 2024, above the 20-year average of 2.6%. Despite an overall dip in inflation rates, energy and shelter costs may impact the final adjustment.
For the nearly 50 million retired workers, a 3.2% Social Security’s Cost-of-Living Adjustment would mean a monthly increase of around $59, raising payouts to $1,899
This boost is welcome, considering the recent history of low COLAs. However, it falls short of 2023’s exceptional adjustment. As of December 2022, 79% of beneficiaries were aged 65 or older, coinciding with Medicare eligibility. While Part B premiums dipped in 2023, a potential rise in 2024, as estimated by TSCL, could affect retirees’ budgets.
Over the last two decades, Social Security income’s purchasing power has declined by 36%, attributed to CPI-W’s narrow focus. This emphasizes the need for a fair and reflective Social Security’s Cost-of-Living Adjustment system for seniors.
READ ALSO: October Mortgage Rates: Homebuyers Navigate Rising Costs Amid Limited Inventory