As inflation cools, Social Security recipients can expect a smaller COLA increase for next year

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Price maturation is cooling crossed nan economy. While that is bully news for consumers, nan timing of this advancement connected ostentation could extremity up short-changing seniors and different Social Security recipients erstwhile they study their yearly cost-of-living summation later this year.

According to nan latest estimate from The Senior Citizens League, which regularly forecasts Social Security's cost-of-living accommodation (COLA), Social Security recipients tin expect their monthly checks to summation by 2.63% — fundamentally unchanged from nan 2.57% it forecast past month.

The Social Security Administration calculates nan yearly COLA alteration by taking nan mean measurement of nan Consumer Price Index for municipality costs earners and clerical workers (CPI-W) — a somewhat different type of nan regular CPI — for nan months of July, August and September of nan fixed year. It typically announces nan charismatic COLA alteration successful October.

But successful utilizing this methodology, Social Security recipients' checks tin commencement falling down nan wide gait of inflation, according to The Senior Citizens League: Price surges tin hap — and abate — astatine immoderate clip of nan year, and nan COLA whitethorn not relationship for those changes, said Alex Moore, nan organization’s Social Security and Medicare statistician and managing partner astatine Blacksmith Professional Services.

That's what's been happening successful nan pandemic and post-pandemic economy: Between January 2020 and December 2023, nan CPI-W accrued precisely 20% — while nan COLA increases person totaled only 19%.

A matching summation complete that play would person netted Social Security recipients an other $10 successful their monthly payments by 2024, according to NBC News calculations.

For fixed-income recipients, each count counts: In nan League's astir caller rank survey, 34% of retirees said they had visited a nutrient pantry aliases applied for nutrient stamps complete nan past 12 months.

“About 50% of elder households dangle connected Social Security arsenic nan quality betwixt [staying retired of] poverty,” Moore said.

Rob Wile

I americium a Pulitzer Prize-winning journalist covering breaking business stories for, pinch a attraction connected penning for mundane consumers and ensuring online sum of awesome business events. Day-to-day, I americium responsible for penning astir ostentation reports, recalls, firm announcements and consumer-focused authorities announcements, including regulations and enforcements. I besides constitute features and explainers connected a wide array of topics — everything from Disney’s conflict pinch Florida Gov. Ron DeSantis to nan caller colony pinch nan National Association of Realtors that will alteration really homebuyers salary brokers, to nan business of nan WNBA.

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