With over two decades of surveys, Gallup reveals that for retirees, at least 80% rely on their monthly benefits, while 76% to 88% of future retirees anticipate needing Social Security income to cover expenses.
Social Security benefits are set to see a significant increase in 2024, as the annual Cost of Living Adjustment (COLA) is projected to provide much-needed relief for retirees
The Cost of Living Adjustment (COLA), scheduled to be announced on October 12, 2023, addresses inflation, ensuring beneficiaries maintain their purchasing power. The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) tracks price movements in various categories. Only third-quarter readings from July to September are considered for benefit adjustments.
In 2023, a historic 8.7% Cost of Living Adjustment (COLA) provided an average monthly increase of $146 for retired workers, the largest since 1940. The question now is what lies ahead for the nearly 67 million beneficiaries in 2024.
Senior Social Security policy analyst, Mary Johnson, forecasts a 3.2% Cost of Living Adjustment (COLA) for 2024, up from earlier estimates. Though less than this year’s increase, it surpasses the 20-year average of 2.6%.
For the roughly 50 million retired workers with an average monthly payout of $1,840.27, a 3.2% COLA means an extra $59 monthly, starting in 2024
Long-term disabled workers and survivor beneficiaries will also see increases. However, seniors face challenges due to the CPI-W’s focus on urban wage earners and clerical workers, which does not accurately represent seniors’ spending patterns. This has led to a 36% decline in their purchasing power since 2000.
Additionally, potential increases in Medicare Part B premiums, driven by costly therapies, could offset the 3.2% Cost of Living Adjustment (COLA) for some low-earning retirees. While an above-average Cost of Living Adjustment (COLA) is anticipated, not all retirees will benefit equally.