Price growth is slowing across the economy, which is good news for consumers, but depending on the timing of the inflation developments, seniors and other Social Security recipients could be at a disadvantage when they find out their annual cost-of-living increases later this year.
by Latest quote According to the Senior Citizens League, which regularly estimates Social Security’s cost-of-living adjustments (COLAs), Social Security recipients can expect their monthly benefits to increase by 2.63%, essentially unchanged from the 2.57% it predicted last month.
Social Security Administration calculate The annual COLA change is calculated using the average July, August, and September measurements of the Consumer Price Index for Urban Wage Earners and Clerical Employees (CPI-W) (a slightly different version of the regular CPI) for a particular year. Official COLA changes are usually announced in October.
But using this method could cause Social Security recipients’ checks to lag behind the pace of overall inflation, according to the Senior Citizens League. “Price increases can come and go at any time throughout the year, and the COLA may not take those changes into account,” said Alex Moore, the group’s Social Security and Medicare statistician and managing partner at Blacksmith Professional Services.
This is what’s happening in the pandemic and post-pandemic economy: Between January 2020 and December 2023, the CPI-W increased by just 20%, but COLA increases totaled just 19%.
If that amount of increase were made over that time, Social Security recipients would see an extra $10 in monthly payments by 2024, according to calculations by NBC News.
For those on fixed incomes, every number matters: In the league’s most recent membership survey, 34% of retirees said they had visited a food pantry or applied for food stamps in the past 12 months.
“About 50% of elderly households depend on social security. [staying out of] “Poverty,” Moore said.
