Social Security Cost-of-Living Boost Will Be Smaller in 2024

( – Social Security recipients will receive a payment boost of 3.4% in 2024 – much smaller than the inflation rate and less than was expected. Retirement payments will rise by $59 to $1,907 from January next year, which Mary Johnson from the Senior Citizens League described as a “small amount” but “some cushion.” The percentage is far smaller than 2023’s 7.8% increase and the 5.9% jump in 2022.

Johnson added that she is optimistic that prices will fall and noted that the 3.4% rise is still significantly higher than the average for the past twenty years, which is 2.6%.

Despite Johnson’s optimism, prices are up 3.7% according to the Consumer Price Index, and a survey by the Senior Citizens League suggests most of its members are concerned about their finances in the current economic climate. Fifty-six percent of poll respondents said they worried that the boosted amount would not cover bare essentials.

A further study by the Senior Citizens League found that Social Security payments have lost 36% of their buying power since 2000, adding that $517 extra each month is needed to make up the shortfall.

Some advocates argue that Social Security increases for retired people should be measured separately from the metric that measures against urban wages and clerical pay. They say that increases should consider the extra medical expenses older Americans often need to account for. However, a complication arises because too much increase could affect entitlement to Medicaid and other benefits or even bring recipients past the tax-paying threshold.

The Financial Times reports that inflation is expected to hold steady or fall slightly to 3.6% in October. However, housing, fuel, and food costs remain far higher than last year. If inflation stays the same or falls, this will impact the Federal Reserve’s position on interest rates, which have remained high to control the cost of living. The Fed is expected to stick to 5% at its next meeting in November.

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