The amount of money paid out in Social Security benefits may rise a little more than anticipated in 2024, but a group advocating for seniors claims that this amount will still be insufficient.
The cost of living adjustment for Social Security, or COLA, is expected to reach 3.2% in 2024, according to the Senior Citizens League on Wednesday. The group calculated that it would increase monthly benefits by around $57, bringing the average recipient’s benefit amount to $1,790.
The cost-of-living adjustment is determined by averaging the inflation measurements for the months of July, August, and September. It is based on the Bureau of Labor Statistics’ Consumer Price Index of Urban Wage Earners and Clerical Workers (CPI-W), in particular.
In July and August, the CPI-W grew 3.6% and 3.4%, respectively.
In the midst of a confluence of pandemic stimulus payments, a spike in spending and shopping, and severe supply chain issues, inflation soared to 40-year highs in 2022. The Federal Reserve responded by quickly raising interest rates as a result. The benchmark interest rate in the United States is at its highest point in more than 20 years.
Inflation is still stronger than it was during the 2010s, despite the economy slowing down a little in 2023 compared to last year.
The Senior Citizens League claims that although Social Security benefits increase each year, the cost of the goods and services that retirees want is rising far more quickly.
According to the advocacy group, elderly recipients are more at risk because those who retired before 2000 would require an additional $500 in payments per month just to regain their purchasing power from that year.
The Senior Citizens League had earlier stated that the increase for the following year might only be 2.7%.
Despite the fact that American employees’ earnings have been rising and are now beginning to outperform inflation, this does not benefit those who have retired & are no longer receiving a salary. The league also contends that the majority of people leave the workforce before they are old enough to be eligible for the full amount of Social Security payments.
In the middle of October, the Social Security Administration is anticipated to make the formal COLA announcement.
According to BLS statistics issued on Wednesday, the U.S. Consumer Price Index increased 3.7% overall in August. Gas price increases were the main reason why prices for consumers climbed more quickly last month, although the cost of housing has increased by more than 7% over the past year. Additionally, the price of goods like medicines and medical supplies has increased.