Newsbreak: Slowing Inflation Brings Relief to Many, but Could Leave Social Security Recipients in the Lurch!

In 2022, inflation soared, causing financial difficulties for many US consumers. To keep up with bills, a lot of people ended the year in debt. However, inflation is slowly cooling down. In June, as reported by USA Today on March 14, 2023, the annual increase in inflation was 9.1%, while in February it was 6%. While falling inflation is good news for consumers in general, it could spell trouble for Social Security recipients.

Social Security recipients rely on cost-of-living adjustments (COLA) to keep up with inflation. COLAs are based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) data. Seniors on Social Security received an 8.7% COLA in January 2023, but February’s CPI-W rose just 5.8% year over year. If the trend continues, seniors may not receive a COLA in 2024, according to USA Today’s report.

Even if seniors receive a COLA in 2024, it may not be as generous as the 2023 raise. Social Security benefits won’t go down in 2024, but they may not receive a boost, as reported by The Motley Fool on March 17, 2023. Therefore, seniors should try to save money in 2023, as no COLA is possible in 2024. Unfortunately, many seniors have little wiggle room in their budgets due to living costs remaining high. Those with the ability to save money may be grateful for having done so if a COLA doesn’t come through for 2024.