Social Security ’24 adjustment will be lower
WASHINGTON — Looking ahead to retirement next spring, Karla Abbott finds comfort in the cost-of-living increase that millions of Social Security recipients get each year. But with consumer prices easing, the new boost will be far lower than this year’s 8.7%.
Analysts estimate the adjustment for 2024 will be around 3.2%.
After working 38 years as a nurse, the 61 years-old Sioux Falls, South Dakota, resident said she’s been saving for retirement since she was 18. But she isn’t certain that it will be enough, even with her Social Security benefits.
Still, she said Social Security’s annual cost-ofliving increases provide some support as she and her husband plan out their non-working years. “The increases will be helpful, certainly to those of us who are still doing the math on retirement,” she said.
Every year the agency adjusts its benefits, based on inflation. The 2024 Social Security cost of living increase — or COLA — is to be announced Thursday.
The program pays roughly $1.4 trillion in benefits to more than 71 million people each year, including low-income individuals with disabilities.
Charles Blahous, a former Social Security trustee, said the annual COLA announcement is a reminder about the program’s stressed finances. “This is an important system, and we need to restore its solvency, because if lawmakers can’t do that, then Social Security and its basic financing design would have to be abandoned,” he said.
The annual Social Security and Medicare trustees report released in March said the program’s trust fund will be unable to pay full benefits beginning in 2033. If the trust fund is depleted, the government will be able to pay only 77% of scheduled benefits, the report said.
The COLA is calculated according to the Bureau of Labor Statistics’ Consumer Price Index, but there are calls to use a different index — and for the agency to instead use the CPI-E, which is the index that measures price changes based on the spending patterns of the elderly — like healthcare, food and medicine costs.
Mary Johnson, Social Security and Medicare policy analyst at the Senior Citizens League, says her organization supports the Social Security Administration using whichever index is higher to best protect older people from inflation.
Any change to the calculation would require congressional approval. But with decades of inaction on Social Security and with the House at a standstill after the ouster of Speaker Kevin McCarthy, seniors and their advocates say they don’t have confidence any sort of change will be approved soon.
“I feel like there’s a lot of distraction in Washington,” Abbott said. “Does anyone even care about what is happening with Social Security? I have no clue why they can’t come together on something so important.”
Social Security is financed by payroll taxes collected from workers and their employers. The maximum amount of earnings subject to Social Security payroll taxes for 2023 is $160,200, up from $147,000 in 2022.