Retired Americans receiving Social Security payments may see a higher-than-anticipated increase next year, a policy group predicted, citing higher-than-expected inflation for the start of 2024.
The cost-of-living adjustment (COLA) for monthly payments could be 2.4 percent starting next year, an increase from a previous forecast, said the Senior Citizens League, a nonpartisan group representing retired people, according to several reports this week.
“This is way early,” Mary Johnson, a policy analyst with the Senior Citizens League, told CNBC. “It will change multiple times since the COLA is on the average inflation in the third quarter of the year against the previous year.”
She added: “A lot can happen between now and then.”
“It is an ongoing struggle for seniors and retired people trying to keep up with these costs,” she added. “It’s like being stuck in the mud. They’re spinning their wheels. Every time someone thinks they have all their bills settled, and they get a small raise with a new COLA, there’s always some new healthcare disaster right around the corner, or their rent increases by more than the amount of the COLA.”
Last month, the seniors policy group projected that 2025’s Social Security checks would see a 1.75 percent increase based on the January CPI data.
“It’s really important for people to stay informed about what’s on the horizon for Social Security,” Ms. Johnson said. “Some of those changes can affect our pocketbooks in the very near future. So it’s a good time to get up to speed on what those changes are and how it could affect you.”
Inflation Worries
Inflation picked up in January, and was largely blamed on the price hikes by service providers at the beginning of the year, which economists said were not fully addressed by the model used by the government to strip out seasonal fluctuations from the data.There was also a jump in owners’ equivalent rent, a measure of the amount homeowners would pay to rent or would earn from renting their property, which diverged from rents, according to the Labor Department’s report.
The cost of health care was unchanged after rising 0.5 percent in the prior month. Hospital services prices decreased 0.6 percent, but the cost of dental services increased 0.4 percent. Airline fares accelerated 3.6 percent while motor vehicle insurance cost 0.9 percent more.
Services excluding energy increased 0.5 percent after shooting up 0.7 percent in January. The rise in the so-called super core services excluding shelter slowed to 0.5 percent from 0.8 percent in the prior month.
Goods prices rebounded by 0.4 percent after falling 0.3 percent in January. They were boosted by increases in the prices of apparel. Used cars and trucks prices jumped 0.5 percent.
Core goods prices rose 0.1 percent, the first increase since last May, after falling 0.3 percent in January.