Although the declining rate of inflation in the United States is excellent news for consumers, it may result in Social Security beneficiaries receiving a much lower COLA the following year possibly as little as 2% or less. Based on the most recent inflation statistics, the Senior Citizens League, a nonpartisan seniors advocacy organization, gave that estimate. The 2024 COLA would be the lowest rise since 2020 if it dips below 2%.
Calculation Of Social Security COLA
Every October, the Social Security Administration calculates COLA. The agency grounds its calculation on the difference between the third quarter and second quarter of the previous year’s CPI-W values. The COLA is zero if there is no adjustment. Social Security beneficiaries can anticipate a significant rise in the amount they receive each month for the upcoming fiscal year when the CPI-W rise is particularly high, as it was throughout the third quarter of 2022. Now, that is the situation. The 2023 COLA is 8.7%, which is the greatest level in more than 40 years due to the last year’s extremely high inflation rate.
COLA 2024
The Senior Citizens League’s forecast for a significantly reduced COLA in the year 2024 is based on the declining 12-month average inflation rate for the CPI-W. The U.S. Bureau of Labor Statistics released a report this week stating that the overall inflation rate increased by 6% for the calendar year concluding in February 2023. Since the time ending in September 2021, that was the least 12-month increase. For seniors, who have a lot of experience coping with COLAs that don’t keep up with inflation, some minor changes next year could be bad news. Not all retirees are persuaded that the all-time high 8.7% COLA this year will help combat the high prices of food and other goods.
Over fifty percent of older consumers “remain unconvinced” that the 8.7% COLA will keep track of increasing costs in 2023, according to a recent poll from The Senior Citizens League. The same proportion of survey participants claimed that their household expenses would increase by more than the present COLA in 2022 reports Yahoo Finance.
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