Social Security is scheduled to increase by 3.2% in 2024, but many seniors are concerned about how they will be able to survive with limited inflation adjustments.
In Atticus’ new report, a majority of seniors expressed dissatisfaction with the 2024 Cost of Living Adjustment (COLA). A total of 62% of the 400 Americans age 62 and older surveyed said they were dissatisfied with their COLA. Payment bump.
“A 3.2% COLA increase in 2024 sounds good on paper, but honestly, it’s not a big enough number for seniors,” said Christopher, financial advisor and president of Houston First Financial Group.・Mr. Hensley said. Newsweek.
The concerns are heightened because nearly three in five seniors are experiencing financial hardship, and 70% of single seniors are already struggling on their existing Social Security income.
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The impact of a small COLA increase could be severe, with about 2 in 5 seniors saying they would look for a job because of a small increase. Among single seniors in particular, 47% said they would consider employment to supplement their income.
Hannah Workman, a member of Atticus’ creative team, said: “While the 3.2% adjustment acknowledges inflation, it is not enough to account for increases in all essential living costs such as utilities, medical costs and groceries.” Ta. newsweek. “Nearly 40% of seniors need to consider employment, highlighting the disconnect between COLA increases and the reality of senior spending.”
Hensley said the Consumer Price Index (CPI) does not fully reflect the reality of older people. A better measure is the CPI-E (for seniors), which reflects what people over 62 spend their money on.
“This is a big issue because things like medical bills can be big expenses, and they get a bigger weight in the CPI-E,” Hensley said. “Older people often spend much more on health care than younger people, and those costs only increase as they get older.”
“So if the COLA is based on that, it doesn’t really match the actual financial strain they’re feeling, especially the health care costs that always seem to be increasing,” Hensley added. “This discrepancy has some serious consequences.”
Drew Powers, founder and registered investment advisor at Powers Financial Group, says many seniors rely on Social Security for a large portion of their retirement income, so making sure your payments keep pace with inflation is key. stated that it is extremely important for survival.
“Older people tend to spend more on health care, and those costs are typically greater than the general rate of inflation,” Powers said. newsweek. “This year’s drop in gas prices has played a big role in lowering overall inflation, but older people are spending less on gas than younger generations, who are commuting to work and taking their children to and from activities. not.”
Seniors typically face the dire effects of inflation when it comes to everyday grocery expenses, but COLA price increases may not fully reflect that.
In the most extreme cases, a small COLA increase could cause some seniors to delay retirement altogether.
But Drew Stevens, an international financial educator for individuals looking to optimize their retirement, says this reflects the continuing need for retirees to plan early. He said that
“America is on a dangerous path, with more than 12,000 people starting to turn 65 every day next year, and for many, about 40%, relying on Social Security as their primary source of income.” Stevens said. Newsweek. “The reason seniors are frustrated is because saving for retirement should be a priority, and even though mortality rates are hitting seniors hard right now, Social Security can save them from financial hardship. Because I think it should be.”
Still, seniors themselves feel that this system, which regularly adjusts payments based on inflation, does not fully encapsulate the current economic environment.
“I think the 3.2% COLA increase is very alarming and inappropriate,” said Dmitry Shelepin, the agency’s CEO of SEO. milomind said a social security senior. Newsweek. “It’s a slap in the face to those who have dedicated their lives to building our society and deserve a dignified retirement.”
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