Inflation is taking a major toll on all Americans, including seniors and others who may rely on monthly Social Security payments. Thus, Social Security’s cost-of-living adjustment (COLA) calculation for 2024 will be extremely important. However, a prominent COLA prediction indicates a Social Security increase that would be less than some people might expect.
So, you’ll definitely want to mark your calendar for Oct. 12. That’s when the Social Security Administration will announce the COLA for next year, and it could have ripple effects throughout the U.S. economy.
COLA Prediction Suggests a Potentially Small Social Security Increase
A recently published statement from the Senior Citizens League predicts that the 2024 Social Security COLA will be 3.2%. The Senior Citizens League has been described as a “pro-senior think tank.”
So, is 3.2% an acceptable upward adjustment for 2024? To put it in perspective, the 2023 COLA was 8.7%. Consequently, some seniors may be unhappy with a 3.2% COLA in 2024 if it happens.
Again, that’s only a prediction and not necessarily what will actually occur. Still, it’s alarming to consider that America’s seniors might only receive (per the Senior Citizens League’s forecast) an additional $57.30 per month, for a total of $1,790 in monthly Social Security payments.
We don’t have the September Consumer Price Index (CPI) print yet, but the August annualized CPI increase was 3.7%. Hence, a 3.2% COLA could be insufficient to meet the financial needs of America’s seniors during this time of “sticky” inflation.
What You Can Do Now
Unfortunately, some Social Security recipients may have to rely on their personal savings to make ends meet in 2024. That’s a harsh reality that needs to be addressed at the federal level.
Meanwhile, younger Americans should pay attention to COLA and related developments in the news. Clearly, it’s not a great strategy to rely solely on government support in one’s golden years.
Therefore, the time to save and invest your money is now, not when you’re about to collect Social Security benefits. Preparing yourself now for what’s to come later could make a huge difference in your ability to retire securely and comfortably.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
