Estimate for 2024 Social Security COLA drops with inflation

The Senior Citizens League estimates that the cost-of-living adjustment to Social Security benefits could drop to 2.7% for 2024, down from the 2023 COLA of 8.7%.

With the consumer price data for May showing inflation falling to its lowest point since March 2021, the Senior Citizens League estimates that Social Security’s cost-of-living adjustment for 2024 could drop to 2.7%.

The consumer price index for urban wage earners and clerical workers, known as the CPI-W, the index that’s used to determine the COLA, rose 3.6% year over year in May, according to a report released Tuesday by the Bureau of Labor Statistics. That’s the lowest level since March 2021, when the CPI-W rose 3%.

Last October, the Social Security Administration announced that it would increase retirement benefits by 8.7% for 2023, the largest cost-of-living adjustment in 42 years.

As for the topline numbers, the consumer price index for all urban consumers rose 0.1% in May on a seasonally adjusted basis, after increasing 0.4% in April, the Bureau of Labor Statistics said, and was up 4.0% over the last 12 months, before seasonal adjustment.

Despite the decrease in the rate of inflation, an ongoing survey through June 6 by the Senior Citizens League shows older consumers are reporting little improvement in their household spending. The survey of 2,275 respondents showed 62% of survey participants reported food costs as their fastest-growing cost, while housing costs are the biggest concern for 22%.

“Since January of this year, the actual inflation rate, as measured by the CPI-W, was lower than the amount older Americans received in their 8.7% COLAs,” Mary Johnson, Social Security and Medicare policy analyst at the Senior Citizens League, said in a statement. “That difference theoretically should provide a modest temporary improvement in buying power of roughly $52 per month for a retiree with average benefits of $1,694.”