Social Security COLA increase may be smaller than previously estimated, senior group says
(NEXSTAR) – The next cost-of-living increase for Social Security recipients is likely to be the lowest in years, the Senior Citizen’s League predicts.
The Senior Citizen’s League (TSCL), a nonpartisan senior advocacy group, says the latest data from the Bureau of Labor Statistics indicates that 2024’s cost-of-living adjustment (COLA) is likely to be somewhere around 2.7% — the lowest increase since 2020.
The group’s previous estimate, released in May, had put that number slightly higher at 3.1%.
The reason for TSCL’s revised estimate concerns cooling inflation — or at least the appearance of cooling inflation presented by the Labor Bureau’s Consumer Price Index for Urban Wage Earners (CPI-W). But analysts with TSCL have said that these numbers — which are ultimately used by the Social Security Administration to determine the annual COLA — don’t reflect the “stubbornly high” prices that seniors continue to pay on key items.
“Inflation is moderating, but a lower inflation rate has not necessarily meant that prices have decreased,” TSCL wrote in a study published in May.
Last year’s COLA increase, at 8.7%, was the largest in over four decades, partially thanks to supply-chain disruptions which fueled soaring inflation amid the pandemic.
Even with the record increase, however, more seniors are struggling to cover costs of food, housing, and healthcare, according to TSCL’s report. Social Security benefits have lost about a third of their buying power since 2000, even when accounting for every COLA increase over the last 22 years, TSCL says.
Data released by the Labor Department on Tuesday confirmed that food prices and shelter, compared to previous years, are still disproportionately high despite inflation falling to its lowest rate since 2021.
“For every $100 a retired household spent on groceries in 2000, that household can only buy about $64 worth today,” TSCL wrote in its report.
The group’s current projection — a COLA of 2.7% — is subject to change over the coming months, of course. The official COLA will be announced by the Social Security Administration in October, before going into effect in January 2024.
Source: The Hill
