The Senior Citizen’s League advocacy group has predicted that the cost-of-living adjustment (COLA) increase for Social Security recipients in 2024 might be around 3 percent, lower than the 8.7 percent increase in 2023. This estimate is based on new consumer price data released by the federal government suggesting a slowdown in consumer inflation. The COLA adjustment is determined by the inflation for the months of July, August, and September, measured by the Consumer Price Index (CPI) data published by the Labor Department.
However, the Senior Citizen’s League emphasized that this estimate could change as there are still three more months of data before the COLA is announced in October. The inflation for those three months will be added together, averaged, and compared with the third-quarter average from the previous year.
If the COLA does indeed raise by 3 percent, the average monthly Social Security payment would increase by approximately $53.60 to $1,787. This is an improvement compared to last year’s increase, which meant an average raise of $140 per month for recipients. However, it is important to note that the final impact on beneficiaries’ finances will depend on the announcement of Medicare Part B premiums, which are automatically deducted from most recipients’ Social Security benefit. In some years, the Part B premium increase can consume most or all of the COLA, leaving little funds to cover other rising prices.
The Senior Citizen’s League also pointed out that the Consumer Price Index is not an ideal metric for assessing the spending habits of the average retired person. Seniors face “stubbornly high” prices for prescription drugs, housing, dental services not covered by Medicare, and other essential expenses. A previous report issued by the Senior Citizen’s League indicated that a lower inflation rate does not necessarily mean that prices have decreased for goods and services.
The group further projected that drug and related Part B services required for administering and monitoring patients for dangerous side effects could add about $5 per month to the Medicare Part B premium in 2024. This could potentially raise the premium to around $179.80 per month, resulting in an overall increase of almost $15 per month from 2023. Additional costs could push the Part B premiums even higher.
Mary Johnson, representing the Senior Citizen’s League, highlighted that the COLA has not kept pace with the inflationary pressures experienced by seniors in 2021 and 2022 when inflation reached a 40-year high. Many retirees feel the impact of this shortfall, as household costs rose more than the dollar amount of their COLAs.
The future of Social Security and Medicare has become a prominent topic in the political landscape as the 2024 campaign gains momentum. President Joe Biden has pledged to resist any Republican-led efforts to cut Medicare or Social Security benefits in response to the projected shortfall. He has proposed raising taxes on individuals earning $400,000 or more annually to bolster Medicare. However, he has not yet presented a plan for Social Security.
An Associated Press-NORC Center for Public Affairs Research poll conducted in March revealed that most U.S. adults oppose proposals that would reduce Medicare or Social Security benefits. In contrast, the majority support raising taxes on the highest earners to maintain the current functioning of Medicare. The poll also indicated that many Americans have concerns about the stability of these programs, with only about 2 in 10 expressing confidence that the benefits will be available when needed.
As Social Security and Medicare face challenges due to inflation, economic output, and inadequate tax revenue, finding sustainable solutions will remain crucial in ensuring the stability and availability of these vital programs for older and disabled individuals.