Inflation appears to be on the wane, but that good news likely hides an unpleasant downside for Social Security recipients, according to one advocacy group.
An overall slowdown in the rise of prices as tracked by the federal government’s Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) means that next year’s Social Security cost-of-living adjustment (COLA) is likely to be much lower than the 8.7% increase for 2023, according to the Senior Citizens League.
As of Aug. 10, the league forecasts the COLA for 2024 to fall to 3%. That means the average benefit would increase by $53.70 per month — before accounting for changes to the Medicare Part B premium, which is withheld from many retirees’ benefit payments.
The latest government inflation data shows that in July, prices rose 3.2% compared with one year earlier and rose 0.2% compared with one month earlier. While that means prices are still climbing, the rate of increase has fallen sharply. In the recent past, the annual inflation rate went as high as 9.1%.
As inflation cools, it becomes more likely that Social Security recipients will see a smaller COLA next year.
While the Senior Citizens League acknowledges that inflation is moderating, it notes that a lower inflation rate has not necessarily meant that prices have come down.
In fact, the league recently projected that Medicare Part B premiums would rise by about $15 per month in 2024. That would mean the average Social Security benefit would increase by only about $38.70 per month ($53.70 minus $15).
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