Throughout the economy, price growth is slowing down. Although this is excellent news for consumers, retirees and other Social Security beneficiaries may be shortchanged when they get their yearly cost-of-living rise later this year due to the timing of the inflation improvement.
As per the most recent projection by The Senior Citizens League, a group that consistently projects Social Security’s cost-of-living adjustment, or COLA, beneficiaries may anticipate a 2.63% monthly rise in their benefits – practically remaining constant from the 2.57% predicted by the organization last month.
The annual COLA adjustment is determined by the Social Security Administration using the average measure of the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), a modified version of the normal CPI, for the months of July, August, and September in a given year. The formal COLA update is usually announced in October.
However, The Senior Citizens League claims that using such system might cause Social Security benefits to lag behind the rate of inflation overall: The organization’s Social Security and Medicare statistician, Alex Moore, managing partner of Blacksmith Professional Services, said that price increases might happen and subside at any time of the year and that the COLA might not take such fluctuations into account.
The economy during and after the epidemic has been like this: While COLA increases have totaled just 19%, the CPI-W climbed by precisely 20% from January 2020 and December 2023.
NBC News calculated that a matching increase during that time would have resulted in an additional $10 in monthly benefits for Social Security beneficiaries by 2024.
Every little amount matters to people on fixed income: According to the last membership poll conducted by the league, 34 percent of retirees reported using a food pantry or applying for food stamps in the previous year.
According to Moore, Social Security is essential to around 50% of elderly families’ ability to avoid poverty.
