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COLA update: Social Security adjustment for 2024 will be less

Social Security recipients should not expect the cost-of-living adjustment (COLA) for 2024 to match 2023’s high increase, despite ongoing concerns over inflation affecting beneficiaries’ purchasing power.

The Senior Citizens League (TSCL), a nonpartisan senior advocacy group, predicts the 2024 COLA to be around 3.1%, a significant drop from 2023’s increase of 8.7%, the largest in over four decades. While analysts worry that lower inflation rates could lead to a smaller COLA increase, TSCL also highlights that lower inflation does not necessarily mean a decrease in prices.

The TSCL suggests that the Consumer Price Index, used to determine COLA, does not accurately account for seniors’ spending habits and the rising costs of essential items such as prescription drugs, food, housing, and dental services.

This inadequacy, the group argues, results in a declining purchasing power for Social Security benefits, which have reportedly lost about a third of their value since 2000, even after adjusting for COLA increases. The TSCL emphasizes that, no matter the final COLA increase for 2024, it likely won’t sufficiently meet the needs of seniors, given several economic issues, including potential Social Security insolvency and fewer jobs offering pensions.

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