Thanks to a jump in August’s Consumer Price Index (CPI), the estimated 2024 cost of living adjustment (COLA) for Social Security recipients rose slightly, according to The Senior Citizens League.
The League estimates the 2024 COLA will be 3.2%, slightly higher than the 3% it estimated in August. The increase is based on average inflation during July, August, and September as measured by the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).
In July, the CPI-W rose 3.6% and was 3.4% in August.
Inflation for July through September is added together and averaged, then compared with the third quarter average from one year ago. The percentage difference between the two is the amount of the COLA, which would be payable for the check received in January 2024.
“While a 3.2% COLA is significantly lower than the 8.7% received in 2023, the highest COLA in more than four decades, it’s higher than the average over the past 20 years — which was 2.6%,” the League said in a statement.
Official announcement will be in October
The Social Security Administration is expected to announce the COLA for 2024 in mid-October.
If the COLA turns out to be 3.2%, it would raise an average monthly retiree benefit of $1,790 by $57.30.
The 2023 COLA was the highest in 40 years, but the Senior Citizens League maintains that it still fell short of what most retirees need. It was preceded by nearly a decade of marginal increases.
According to the League’s latest Retirement Survey, 45% of those participating report spending less than $2,000 on monthly expenses in 2023. Thirty-seven percent reported spending between $2,000 and $3,999 each month.
“Social Security benefits are modest, replacing roughly one-third of a middle earner’s average wages, according to an Actuarial Note from the Social Security Office of Chief Actuary,” the League’s statement said. “Making matters worse, most older adults claim Social Security benefits before reaching full retirement age and receive permanently reduced benefits.