While inflation remains skyrocketing and if current inflation trends hold, the Social Security cost-of-living adjustment for 2024 could fall well below 3%.
Social Security Cost-Of-Living Adjustment For 2024 Could Fall 3% – Here’s Why! (PHOTO: Money)
The Social Security Cost-Of-living Adjustment For 2024
The Senior Citizens League’s Mary Johnson a Social Security and Medicare policy analyst emphasized that its important to keep in mind that inflation was at the highest level in 40 years in 2022, resulting in a near-record 8.7% 2023 COLA. However, inflation remains far above the Federal Reserve’s target, and the monthly average rate of the key CPI-W index is dropping. If this inflation continues Social Security cost-of-living adjustment for 2024 might fall well below 3 percent, and depending on what happens through the third quarter, there is a decent chance that no Social Security Cost-Of-living Adjustment for 2024 could be given to benefits for beneficiaries.
This fact was produced by the Social Security Administration calculates its yearly adjustment, which means there’s “every chance” in Social Security Cost-Of-living Adjustment for 2024 could be as low as 0%. Johnson highlights that the actual outlook for Social Security Cost-Of-living Adjustment for 2024 stays skeptical, given the fact that inflation rates are surprising and the results for the third quarter will be crucial to the end figure. As such, The Senior Citizens League won’t begin any official estimates of the Social Security Cost-Of-living Adjustment for 2024 until May, but based on February inflation data, the COLA “looks like it will be below 3 percent and could fall into the 2 percent or even lower range.”
Here’s How To Calculate COLA
Johnson pint outs the Social Security cost-of-living adjustment for 2024 that the Administration uses average inflation in the third quarter, based on the consumer price index for urban wage earners and clerical workers (referred to as the CPI-W), to calculate the benefit adjustment for the following year.
As of mid-March, Johnson says, the average rate per month of CPI-W inflation is falling. While she sees this as a less likely outcome if the higher monthly trend is sustained for several months, the COLA could range somewhat higher than the present projection, but there’s too much unknown to confidently say exactly what might happen.
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