The Social Security Administration (SSA) has announced that the estimated average monthly retirement benefit for 2024 will increase by 3.2%, or $59 a month, starting in January. This increase is a result of the agency’s annual cost-of-living adjustment (COLA), which will be implemented on a staggered, weekly basis depending on the recipient’s birthday.
However, this year’s COLA increase is much lower compared to the 8.7% increase seen in 2023, mainly due to a recent slowdown of price increases. The annual COLA is calculated based on inflation readings for July, August, and September, and in those months, the relevant measure of 12-month inflation was 2.6%, 3.4%, and 3.5%, respectively.
Despite this recent slowdown, many Americans on fixed incomes, especially seniors, will continue to struggle financially. Average prices in the U.S. have increased more than 20% since mid-2020, while the Social Security cost-of-living adjustment has increased only 17.8% over the same period, causing financial burdens for fixed-income earners.
As shelter costs continue to trend upward, seniors are among the most affected. The average older person spends 49% of their household budget on shelter, and housing prices have soared in recent months. In September, a key measure of shelter costs increased by 0.6%, which was the largest rise since February, following a 0.4% gain in August.
Mary Johnson, Social Security and Medicare policy analyst for the Senior Citizens League, a nonpartisan advocacy group, noted that “there is some very sticky inflation.” Experts and economists share Johnson’s concern, particularly with senior citizens being affected the most.
The new estimated average monthly retirement benefit may bring some relief to recipients, but the current economic situation still creates financial difficulties for many. It is hoped that efforts to curb inflation and the rising cost of living can bring more long-term help to those in need.