Newsbreak: Social Security Beneficiaries Brace for Possible Zero COLA in 2024 Due to Uncertain Inflation Trends

Social Security beneficiaries may not receive a cost-of-living adjustment (COLA) next year, and if the current inflation trends hold, the 2024 COLA could be well below 3%. The Senior Citizens League’s Social Security and Medicare policy analyst, Mary Johnson, explained that inflation was at its highest level in 40 years in 2022, resulting in a near-record 8.7% COLA in 2023.

The Social Security Administration uses average Inflation in the third quarter to calculate the benefit adjustment for the following year. Based on February inflation data, the COLA looks like it will be below 3% and could fall into the 2% or even lower range, as reported by Think Advisor on March 17, 2023. Given the unpredictable nature of inflation rates, Johnson noted that the exact outlook for the 2024 COLA remains uncertain.

If the average reading for the third quarter ends up lower than the previous year’s average reading, there may be a 0% COLA, and Social Security benefits would remain the same from one year to the next, according to a report by CNBC on March 20, 2023. Johnson says this is probably a surprising and scary thing to hear for many seniors because they feel a loss of purchasing power due to the high inflation. The Senior Citizens League won’t start any official estimates of the COLA for 2024 until May, but the inflation rate in the third quarter will be crucial to determining the 2024 COLA.