The cost of living adjustment (COLA) for the elderly is expected to decline significantly next year due to higher prices in contrast to lower inflation.
The Social Security Administration is set to release its 2024 Social Security COLA in October this year, and some groups expect the rate to reach 3%, raising the average monthly salary of about $1,787 by about $53. Last October, the SSA touted the current 8.7% monthly increase in retiree earnings as the highest rate of increase in 40 years.
In July, the Federal Open Market Committee (FOMC) announced a 0.25 basis point hike in interest rates from 5.25% to 5.5%. This is the highest level in 22 years and the 11th interest rate hike in the last 12 US central bank policy meetings that began in March. 2022. The FOMC has consistently aimed to keep inflation down to 2%.
The Alliance for Senior Citizens (TSCL), a large non-partisan organization for seniors, announced a figure of 3% in July. In addition to a modest increase in average inflation, this estimate shows that the consumer price index for urban wage earners and office workers (the index used to determine COLA) rose by only 2.3% year-on-year. That’s up from 2.7% in June, considering it’s not. .
In addition to the announcement of Medicare Part B premiums, final rates will be determined over the next three months.
“Although inflation has fallen, prices for many goods and services are still high,” said Mary Johnson, Social Security and Medicare policy analyst at TSCL. Newsweek. “In other words, inflation is not over yet.”
The Commission on the Responsible Federal Budget, the public policy body that assesses federal budgets and financial affairs, has its own projections that Social Security’s COLA will rise between 2.6% and 3.3% in 2024, and if inflation hits We estimate that the higher range only holds for . It keeps going down.
Below are the monthly averages for social security benefits based on SSA data, which also includes an estimated monthly average if the 3% COLA estimate is realized, according to the business forecasts publication Kiplinger.
retiree
- Average monthly profit: $1,837.29
- Average monthly profit with 3% COLA: $1,892.41
Retired spouse
- Average monthly profit: $893.01
- Average monthly profit with 3% COLA: $919.80
children of retired workers
- Average monthly profit: $859.79
- Average monthly profit with 3 percent COLA: $885.58
survivor benefits
- Average monthly profit: $1,451.85
- Average monthly profit with 3 percent COLA: $1,495.41
disabled widow
- Average monthly profit: $1,713.36
- Average monthly profit with 3 percent COLA: $1,764.76
disabled widow
- Average monthly profit: $894.78
- Average monthly profit with 3 percent COLA: $921.62
disabled workers
- Average monthly profit: $1,486.42
- Average monthly profit with 3 percent COLA: $1,531.01
Spouse of a disabled worker
- Average monthly profit: $407.63
- Average monthly profit with 3 percent COLA: $419.86
TSCL surveyed 1,759 retirees in mid-July and found that 79% of them said the continued high prices for essentials such as housing, food and prescription drugs continue to have a significant impact on household budgets. Turned out to be answered.
In the same poll, only 9% said costs were the same as they were a year ago, while 7% said costs had fallen.
The combined cost of a new 30-year fixed-rate mortgage plus a gallon of gasoline hits the highest in more than 20 years, a year ago when inflation was extremely high and the economy fell into recession, Bespoke Investment Group reported. In 2008, when the interest rate exceeded the annual interest rate.
In February, President Joe Biden pledged not to “cut any benefits” related to Social Security or Medicare and vowed to extend the Medicare Trust Fund for at least 20 years.
Newsweek I emailed the SSA and the White House for comment.
