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2024 Social Security COLA: A 3% Boost is Coming, But Not as Impressive as 2023

Published

August 21, 2023

2024 Social Security COLA: A 3% Boost is Coming, But Not as Impressive as 2023 (Photo: USA Today)

As we inch closer to 2024, retirees are bracing themselves for 2024 Social Security COLA (cost-of-living adjustment) that may not pack the same punch as 2023. Forecasts suggest that retirees may see a COLA increase of around 3%, less than half of the whopping 8.7% boost witnessed in 2023.

While a 3% increase in the 2024 Social Security COLA may not match the previous year’s 8.7%, it’s essential to recognize that it’s still above the historical average. (Photo: Flipboard)

2024 Social Security COLA: A 3% Boost is Coming

According to USA Today, the 2023 COLA provided an impressive 8.7% bump for Social Security benefits, the most substantial increase since 1981 when the inflation adjustment was a whopping 11.2%. Even the 2022 COLA was solid at 5.9%.

But what can retirees expect for 2024 Social Security COLA? While nothing is certain yet, some experts suggest an increase of 2024 Social Security COLA in the range of 2.7% to 3.2% is still a strong possibility.

It’s a step back to reality, as Mary Johnson, a policy analyst at the Senior Citizens League, puts it.

However, this “return to reality” of the 2024 Social Security COLA remains above average compared to the last two decades. Over this period, the average inflation adjustment for Social Security benefits was 2.6%, with three years (2010, 2011, and 2016) offering no adjustment at all, a stark 0% for inflation.

Before the upheaval of the COVID-19 pandemic, supply chain disruptions, and federal stimulus payments, inflation adjustments were modest. In 2020, the inflation adjustment for Social Security benefits was a mere 1.6%, followed by a slight 1.3% increase in 2021.

While a 3% increase in the 2024 Social Security COLA may not match the previous year’s 8.7%, it’s essential to recognize that it’s still above the historical average. As we wait for the final COLA calculation, many retirees on tight budgets may find this adjustment more in line with their expectations and financial reality.

Reasons Behind the Decrease of 2024 Social Security COLA

The reason behind this anticipated slowdown of the 2024 Social Security COLA?

Inflation, which has been a hot topic recently, is cooling down, Yahoo reported. As the economic heat subsides, it’s increasingly likely that Social Security benefits won’t surge as dramatically as they did this year.

These predictions come from the Senior Citizens League, a nonpartisan advocacy group known for monitoring inflation data to forecast potential COLA changes. While we currently anticipate a 3% increase in the 2024 Social Security COLA, another estimate is set to be released on September 13, which could potentially sway higher or lower based on new inflation data for August.

We’ll have the exact percentage for the inflation adjustment by mid-October.

As the economy evolves and inflation trends shift, 2024 Social Security COLAs will continue to fluctuate. Yet, for retirees, any increase can make a significant difference in their financial well-being.

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In this article:2024 Social Security COLA,Cost-of-living adjustment,Inflation,Senior Citizens League,Social Security

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2024 Social Security COLA: A 3% Boost is Coming, But Not as Impressive as 2023

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