Social Security’s cost-of-living adjustment (COLA) for 2024 was 3.2%, down after reaching a 40-year high of 8.7% for 2023. The Social Security Administration boosts benefits to recipients in order to help them keep up with inflation. These increases are applicable to more than 71 million beneficiaries, the COLA is derived from the CPI-W, (Consumer Price Index for Urban Wage Earners and Clerical Workers ).
The Bureau of Labor Statistics compares the average CPI-W from the 3rd quarter of the previous year and the current year to know the Social Security COLA. The COLA, or the increase in Social Security benefits is the percentage increase from year to year. How much consumer products and services cost over time is monitored by a consumer price index. Families who get at least half of their income from hourly or administrative work are the target market for this particular index, that focuses on categories of goods and services. Rising CPI-W values are indicative of rising inflation.
Many are now focusing on the 2025 COLA, that is scheduled to be announced on October 10, 2024.According to current COLA forecasts, it will be less than the COLA in 2024, although events in the following few months could alter this.
The Senior Citizens League (SCL) predicts a 3% increase in Social Security’s COLA in 2025. The COLA cannot be disclosed until inflation data is ready, though, because it is based on third-quarter inflation. An increase of $59 per month was made to the average benefit by the Social Security 3.2% 2024 cost-of-living adjustment (COLA). Senior Citizens League (TSCL) data indicates that a considerable number of seniors reported a monthly increase in expenses of over $185 in 2023. Even though it won’t happen until sometime in the future, people who are in need of additional assistance are already paying close attention to it.
COLAs are under review for a number of reasons, as experts claim that these resources are insufficient to keep up with the rising expenditures of retirees’ actual expenses. On the contrary, some advocate for lowering COLAs in order to save Social Security costs, claiming that recipients may make up the difference by making fewer expensive purchases.
