In October 2023, the U.S. Department of Labor released its September inflation report, which plays a crucial role in determining the Cost-of-Living Adjustment (COLA) for Social Security recipients for the year 2024. This adjustment is a vital update for beneficiaries, as it directly impacts their financial well-being.
The report indicates that Social Security beneficiaries will see an increase in their benefits starting January 2024. Additionally, those receiving Supplemental Security Income (SSI) will begin to see increased payments from the end of December 2023. The Senior Citizens League (TSCL), a nonpartisan advocacy group for senior citizens, estimates a 3.2% increase in COLA for 2024. This rate is significantly lower than the previous year’s adjustment of 8.7%.
The Social Security Administration (SSA) calculates the annual COLA based on the percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) during the third quarter of the year. The projected COLA of between 3.0% and 3.5% for 2024 is still above the 20-year average of 2.6%. While this increase is a positive development, it may not sufficiently address the financial challenges faced by seniors, especially with the rising costs of essential items like housing, healthcare, and groceries.
Another factor that will influence the overall impact of the 2024 COLA is the adjustment in Medicare premiums, which are typically announced in November. The Medicare Trustees have predicted an increase in monthly Part B premiums from $164.90 in 2023 to $174.80 in 2024. However, this estimate does not account for any significant new costs that may arise after its release, as noted by TSCL.
This adjustment in Social Security and SSI benefits is a critical update for millions of Americans, particularly senior citizens who rely on these funds for their daily expenses. The COLA not only reflects changes in the cost of living but also highlights the ongoing challenges faced by the elderly in managing their finances amid fluctuating economic conditions.