Good News and Not-So-Good News Regarding the Next Social Security COLA

While Social Security was never intended to provide anyone’s full retirement income, millions of retirees do rely upon the program as a meaningful supplement and a hedge against inflation. That’s because each year, the Social Security Administration analyzes increases in the overall cost of living, and in most years issues a cost of living adjustment (COLA) to allow for a form of retirement income that grows with inflation.

In January 2023, we saw one of the largest-ever COLAs, as beneficiaries received an increase of 8.7 percent to their checks. That historic increase came as good news to those of you who have struggled with skyrocketing inflation in recent years.

And we have more good news: Inflation seems to be cooling off, which means our cost of living is leveling off somewhat. You might have noticed that the prices of things like gas and groceries have become more stable in recent months.

But now for the not-so-good news: The cost of living index used by Social Security has noticed the same trends. And that means your COLA for 2024 probably won’t be nearly as large as this year’s increase.

While the official COLA will be calculated based upon third quarter data, and won’t be announced until October, the Senior Citizens League has already analyzed the trends and predicts a COLA of 2.7 percent for next year.

Some retirees might find that news a bit disappointing after this year’s considerable increase in benefits. But remember that the figures are based upon inflation, and slower inflation means your budget should stretch farther.

Of course, setting up other forms of reliable income represents an even better way to sail through difficult times without much difficulty. If you’re still planning for retirement, schedule a consultation with us so that we can analyze your expected future income and make suggestions for a stable retirement.