The expected cost of living increase for those who get monthly Social Security benefits went up this week on the news that the consumer price index rose in August, however, an advocacy group says the raise will not be enough for seniors to keep up with inflation.
The Senior Citizens League said Wednesday that it estimates the Social Security COLA will be 3.2% for 2024. That would add about $57 to the average monthly benefit, the group says.
That would make the average monthly payment $1,790, according to the TSCL.
While a raise is always good, the TSCL pointed out that most older adults claim Social Security benefits before reaching full retirement age and receive permanently reduced benefits, making it difficult to make ends meet.
“In 2023, retirees received the highest COLA in 40 years — (8.7%), but nobody is getting rich. The reality is that the dollar amount of the COLA increase received is meager at best, with the average monthly retiree benefit only $1,790 in 2023,” the advocacy group said on Wednesday.
“According to TSCL’s latest Retirement Survey, only 45 percent of those participating report spending less than $2,000 on monthly expenses in 2023.
How is the COLA determined? The yearly COLA is based on the July, August and September Consumer Price Index for Urban Wage Earners and Clerical Workers published by the Bureau of Labor Statistics.
The CPI-W rose 3.6% in July and 3.4% in August.
The increase in payments, set by the Social Security Administration and announced in the second week of October, depends on several factors that measure the cost of food, shelter and other items such as transportation, clothing and medical care.
The Social Security Act provides a formula used to calculate each year’s COLA, which is based on increases in the CPI-W. The CPI-W has eight major spending categories used in the formula to determine the next year’s COLA.
While a 3.2% COLA would not come near this year’s historic increase of 8.7%, it’s still higher than the average over the past 20 years, which is 2.6%, according to Mary Johnson of TSCL.
While the average benefit check will go up by $57, the actual amount that Social Security recipients get isn’t known until Medicare announces the Part B premium for 2024. That number is usually announced in November.
Premiums for Part B Medicare are automatically deducted from most checks. The Senior Citizens League projects that the standard Part B premium for 2024 could be about $179.80 a month, up from this year’s $164.90.