The Senior Citizens League anticipates the Social Security COLA for 2024 is expected to be 3%, according to the latest CPI data, issued Wednesday. The CPI data indicates that prices have climbed by 3.0% over the last year while climbing 0.2% in June. This is slightly higher from a 0.1% gain during May, suggesting a continuous, if tiny, drop in yearly inflation. The group’s Social Security COLA projection for 2024 is up from the previous month’s estimate of 2.7% but far behind the near-record 8.7% COLA for 2023. Mary Johnson, the league’s Social Security and Medicare policy analyst, based monthly COLA projections on variations in the CPI-W.
Social Security COLA 2024
According to Johnson, since January of the current year, the CPI-W has shown actual inflation to be lower than the 8.7% COLAs older Americans received. That difference presumably should give a minor temporary gain in purchasing power for a pensioner. As Johnson tells regarding the recently released June data, a COLA of 3% could raise the present average per-month cost of $1,787.00 by slightly over $53.60, yet Social Security claimants won’t discover the bottom line till the Medicare Part B rates are disclosed. In several decades, Johnson notes, the Part B premium hike might swallow most, as well as all, of the COLA, allowing nothing else to pay other rising prices.
Increase In Indices In June
Over 70% of the minor monthly price increase was accounted for by the index for housing, with the index of automobile insurance also contributing. Following a 0.2% increase the month before, the nourishment index increased by 0.1% in June. The index to purchase groceries consumed at home remained constant throughout the month, whereas the index for meals consumed away from home increased more noticeably in June, by 0.4%. As the main energy element indices were mixed in June, the energy index increased by 0.6%. The 0.2% increase in the index for all products excluding food and energy in June was the smallest monthly increase since August 2021.
The sub-indices that went up in June include those for housing, auto insurance, clothing, leisure, and personal care. Airlines prices, communication, secondhand cars and trucks, home furnishings, and business operations were among the indicators that fell over the month. In particular, the all-items index rose 3.0% for the year ending in June. Since the period ending March 2021, this 12-month growth has been the smallest. The index for all things minus food and energy increased by 4.8% during the previous 12 months. For the year ending in June, the energy index fell 16.7%, while the food index rose 5.7%.
Minor Decrease In Inflation Causing Retirees’ Benefit
Despite recent significant COLAs and a minor decrease in inflation, older consumers perceive little gain in their household purchasing power, according to an ongoing poll by The Senior Citizens League. Food expenditures are cited by 62% of survey respondents as their fastest-growing expenditure. Housing expenses were the top concern, reported by 22% of respondents to the survey. The league’s analysis shows that Social Security COLAs added advantages by 78%, or 3.4% annually, from January 2000 to February 2023. During the same time frame, the average cost of products and services for seniors increased by 141.4% or 6.2% yearly. In other terms, a retired household can only purchase around $64 worth of goods today for every $100 they spent on groceries in 2000.