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Here’s the ‘Significantly Lower’ 2024 Social Security COLA Estimate

Retirement Income

The annual Social Security cost of living adjustment (COLA) will be “significantly lower” in 2024, one year after ringing in at 8.7%—the highest adjustment in four decades.

Driven by the declining inflation rate, estimates point to a 3.1% COLA, according to the Senior Citizens League. 

Mary Johnson, Social Security and Medicare policy analyst for the nonpartisan research and advocacy organization, said research on the buying power of Social Security benefits confirms that inflation is moderating. Yet, a lower inflation rate has not necessarily meant that prices have come down.

The 2023 Social Security Loss of Buying Power Study also found that the oldest adults, especially those (age 85 and older) who retired before 2000, have lost 36 percent of their buying power in the two decades since.

“These retirees would need an extra $516.70 per month ($6,200 in 2023) to maintain the same level of buying power as in 2000,” it noted. “The prices older consumers are paying are simply not growing as fast as a year ago, but many prices on key items through February 2023 remain stubbornly high.”

Last year, the same study found that Social Security benefits lost 40% of buying power since 2000. That was the deepest loss in buying power since the annual study began in 2010. While that loss of buying power improved slightly this year, it’s still one of the steepest losses recorded, exceeded only by the loss in 2022.

It compared the growth in the COLA since 2000 with increases in the price of 38 goods and services typically used by retirees over the same period. This year buying power was most impacted by sharp increases in:

  • food items,
  • electricity,
  • rental housing,
  • repair and maintenance costs of motor vehicles, and
  • a 16% increase in the cost of dental care.

Topping the list of fastest-growing items? Eggs. No other spending item on the list grew faster during the survey reference period, which compared the average price change from February 2022 to February 2023.

Between January 2000 and February 2023, Social Security COLAs increased benefits by 78 percent, averaging 3.4 percent annually. But the cost of goods and services purchased by typical retirees rose by 141.4 percent averaging about 6.2 percent annually over the same period.

It concluded that for every $100 a retired household spent on groceries in 2000, that household can only buy about $64 worth today.