In contrast to the previous year, the overall inflation rate in July has seen a notable decrease. However, a recent survey conducted by TSCL indicates that many older Americans still struggle with consistently high prices, impacting their household finances.
Projected COLA for 2024
According to a recent release of consumer price data, The Senior Citizens League (TSCL) projects that the Social Security cost of living adjustment (COLA) by the Social Security Administration (SSA) for 2024 may be approaching approximately 3%. This estimation is based on the latest figures.
The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), used to determine COLA, has risen by 2.6% when comparing year-over-year data. Nevertheless, the average monthly inflation rate has shown a slight uptick, especially since January of this year, thereby maintaining the COLA projection at 3% based on July's pricing data. For reference, the 2023 SSA COLA projections & the current year's COLA stand at a higher 8.7%.
Influence of Oil and Gas Prices on COLA 2024
The disparity between these indices is primarily attributed to the greater influence of oil and gas prices within the CPI-W, as explained by Mary Johnson, a policy analyst specializing in Social Security and Medicare at The Senior Citizens League.
Social Security Benefits for 2024
The forthcoming CPI data, set to be unveiled in September and October, will play a pivotal role in determining the final benefit adjustment for 2024.
Mary Johnson noted, "If gasoline prices experience a significant increase, the COLA estimate is likely to rise. Conversely, a decrease in gas and oil prices could lead to a lower COLA estimate."
Despite the potential increase in the Social Security COLA for 2024, it is unlikely to approach the remarkable 8.7% boost beneficiaries received this year. "Economists may suggest that inflation is moderating and conditions are improving, but consumers continue to grapple with the burden of high prices," remarked Johnson.
In 2023, Social Security recipients experienced the most substantial COLA increase over four decades. Nevertheless, 79% of retirees report that persistently high prices significantly affect their household budgets.
Header Photo by Markus Winkler