The ongoing government shutdown is causing delays in the annual report, which includes the Cost-of-Living Adjustments (COLA) for millions on social security.
Originally set to be announced on Wednesday, the 2024 Social Security COLA will now be revealed on October 24. This update will coincide with the release of September’s Consumer Price Index, which hasn’t come out yet.
Every year, benefits are adjusted to keep pace with inflation. This delay is a recent example of how the ongoing shutdown, which is now in its third week, complicates financial planning for many.
According to forecasts by the Alliance for Aging and AARP, the expected COLA increase is about 2.7%. Approximately 70.6 million people rely on Social Security, including retirees, those living with disabilities, and children.
Many beneficiaries are worried that next year’s adjustment won’t adequately meet rising expenses. Sue Conard, a 75-year-old retired nurse from La Crosse, Wisconsin, joined fellow retired members of a local union to advocate for substantial improvements in healthcare protections and Social Security benefits to help end the shutdown.
Conard expressed a desire for lawmakers to revise how COLAs are calculated, emphasizing that the current CPI doesn’t reflect many typical costs for older adults.
Standing outside the Longworth House office building, Conard stated, “The way COLA is determined is completely incorrect because it doesn’t include medical costs in the CPI.”
Some legislators are proposing measures that would require the Social Security Administration to adopt the Consumer Price Index for the Elderly (CPI-E) for computing COLA increases, which better aligns with senior spending habits on healthcare, food, and medications.
A Democratic caucus has introduced a bill to adjust the CPI for COLA to use CPI-E. Last Congress, Senator Bob Casey (D-Pennsylvania) sought to change the COLA calculation, but it didn’t gain traction in the Senate Finance Committee.
AARP’s CEO, Miekia Minter-Jordan, highlighted that COLA isn’t just a financial adjustment; it represents a critical lifeline for many older Americans. Yet, with the current COLA, most still struggle to manage basic expenses.
Vanessa Fields, a 70-year-old retired social worker from Philadelphia, mentioned she spends about $1,000 monthly on groceries, which feels excessive. She remarked, “If lawmakers don’t intervene, we’re really going to face some serious challenges.”
The agency intends to notify beneficiaries of their new benefit amounts in early December. A spokesperson for the Social Security Department, who requested anonymity, mentioned that despite the ongoing shutdown, retirement benefits and Supplemental Security Income will still be adjusted by January 1, 2026.
This delay in announcing COLA occurs amid significant funding difficulties for the nation’s social insurance program and major staffing cuts within the agency.
The Social Security and Medicare Administrative Board’s annual report, released in June, indicated that the trust fund will start falling short of its full benefit payouts in 2034, one year earlier than previously estimated. If the fund runs dry, beneficiaries may receive only 81% of their scheduled payments.
Additionally, the agency has seen a reduction of at least 7,000 employees from its workforce of 60,000 this year, creating extra pressure on the remaining staff to process claims and address inquiries from a rising number of beneficiaries.
