Social Security COLA Estimated at 3.1% for 2024
What You Need to Know
The estimate reflects a 4.9% rise in prices in April from a year ago, according to The Senior Citizens League.
Social Security benefits have lost 36% of their purchasing power since 2000, according to the advocacy group.
The actual 2024 COLA will be based on third-quarter inflation data and will be announced in October.
The consumer price index data for April, released Wednesday, shows that prices have risen by 4.9% over the past 12 months while increasing 0.4% in April. This is up from 0.1% the previous month, showing a slight acceleration in inflation.
Based on this data, the Senior Citizens League estimates the Social Security cost-of-living adjustment, or COLA, for 2024 will be 3.1%. This is far below the near-record 8.7% COLA for 2023.
Mary Johnson, the league’s Social Security and Medicare policy analyst, bases monthly COLA estimates on changes in the Consumer Price Index for Urban Wage Earners and Clerical Workers, known as the CPI-W. In March, the league offered an early estimate suggesting the 2024 COLA will likely fall below 3%, with a real chance of a retirees seeing a 0% COLA should inflation cool more quickly than expected this year amid a possible recession.
The Social Security Administration uses average inflation in the third quarter, based on the CPI-W, to calculate the benefit adjustment for the following year. This actual COLA for 2024, as such, won’t be known until October.
The Latest Inflation Data
During April, the biggest price increases were in seen in the shelter, used cars/trucks and gasoline categories. The increase in the gasoline index more than offset declines in other energy component indexes, and the energy index rose 0.6% in April.
The food index was unchanged in April, as it was in March. The index for food at home fell 0.2% over the month, while the index for food away from home rose 0.4%.
The index less food and energy rose 0.4% in April, the same as it did in March. For the past 12 months, the items less food and energy index rose 5.5%.
Effects on Retirees
In conjunction with its first formal 2024 COLA projection, the Senior Citizens League has published new research on the buying power of Social Security benefits.
