Social Security cost-of-living adjustment coming — but it won’t be as big as this year’s

Oct 11, 2023, 11:57 AM

FILE - President Joe Biden speaks about his administration's plans to protect Social Security and M...

FILE - President Joe Biden speaks about his administration's plans to protect Social Security and Medicare and lower healthcare costs, Thursday, Feb. 9, 2023, at the University of Tampa in Tampa, Fla. Biden is trumpeting Medicare’s new powers to negotiate directly with drugmakers on the cost of prescription medications, but a new poll from The Associated Press-NORC Center for Public Affairs Research shows that any immediate political boost that Biden gets may be limited. (AP Photo/Patrick Semansky, File)

(AP Photo/Patrick Semansky, File)

WASHINGTON (AP) — Looking ahead to retirement next spring, Karla Abbott finds comfort in the cost-of-living increase that millions of Social Security recipients get each year. But with consumer prices easing, the new boost will be far lower than this year’s 8.7%

Analysts estimate the adjustment for 2024 will be around 3.2%.

After working 38 years as a nurse, the 61 years-old Sioux Falls, South Dakota, resident says she’s been saving for retirement since she was 18. But she isn’t certain that it will be enough, even with her Social Security benefits.

Still, she said Social Security’s annual cost-of-living increases provide some support as she and her husband plan out their non-working years. “The increases will be helpful, certainly to those of us who are still doing the math on retirement,” she said.

Every year the agency adjusts its benefits, based on inflation. The 2024 Social Security cost of living increase — or COLA — is to be announced on Thursday.

The program pays roughly $1.4 trillion in benefits to more than 71 million people each year, including low-income individuals with disabilities.

Charles Blahous, a former Social Security trustee, said the annual COLA announcement is a reminder about the program’s stressed finances. “This is an important system, and we need to restore its solvency, because if lawmakers can’t do that, then Social Security and its basic financing design would have to be abandoned,” he said.

The annual Social Security and Medicare trustees report released in March said the program’s trust fund will be unable to pay full benefits beginning in 2033. If the trust fund is depleted, the government will be able to pay only 77% of scheduled benefits, the report said.

The COLA is calculated according to the Bureau of Labor Statistics’ Consumer Price Index, but there are calls to use a different index — and for the agency to instead use the CPI-E, which is the index that measures price changes based on the spending patterns of the elderly — like healthcare, food and medicine costs.

Mary Johnson, Social Security and Medicare policy analyst at the Senior Citizens League, says her organization supports the Social Security Administration using whichever index is higher to best protect older people from inflation.

Any change to the calculation would require congressional approval. But with decades of inaction on Social Security and with the House at a standstill after the ouster of Speaker Kevin McCarthy, seniors and their advocates say they don’t have confidence any sort of change will be approved soon.

“I feel like there’s a lot of distraction in Washington,” Abbott said. “Does anyone even care about what is happening with Social Security? I have no clue why they can’t come together on something so important.”

The cost of living increases have a big impact for people like Alfred Mason, an 83-year-old Louisiana resident. Mason said that “any increase is welcomed, because it sustains us for what we are going through.”

As inflation is still high, he said anything added to his income “would be greatly appreciated.”

Social Security is financed by payroll taxes collected from workers and their employers. The maximum amount of earnings subject to Social Security payroll taxes for 2023 is $160,200, up from $147,000 in 2022.

There have been legislative proposals to shore up Social Security, but they have not made it past committee hearings.

Jo Ann Jenkins, CEO of the AARP, said the organization “is urging Congress to work in a bipartisan way to keep Social Security strong and to provide American workers and retirees with a long-term solution that both current and future retirees can count on.”

“Americans work hard to earn their Social Security, and it’s only fair for them to get the money they deserve.”

Johnson, the Senior Citizens League’s analyst, said Congress “does not have any record of successfully and timely making changes to Social Security,” and when there were reforms to the program in 1983 — “we were far less divided.”

“Certainly the situation today is so contentious, simply getting there now is a huge effort.”

National News

Associated Press

Insider Q&A: Trust and safety exec talks about AI and content moderation

Alex Popken was a longtime trust and safety executive at Twitter focusing on content moderation before leaving in 2023. She was the first employee there dedicated to moderating Twitter’s advertising business when she started in 2013. Now, she’s vice president of trust and safety at WebPurify, a content moderation service provider that works with businesses […]

1 hour ago

Associated Press

Lawsuit alleges negligence in hiring of maintenance man accused of torturing resident

BALTIMORE (AP) — April Hurley’s attacker entered her apartment after identifying himself as the building maintenance man — a job he should never have obtained, according to a lawsuit filed Monday that accuses the property owner and management company of engaging in negligent hiring practices. Once inside the apartment, Jason Billingsley tortured Hurley and her […]

2 hours ago

Photo: Republican presidential candidate and former President Donald Trump sits in the courtroom at...

Michael R. Sisak, Jennifer Peltz, Eric Tucker and Jake Offenhartz, The Associated Press

Trump tried to ‘corrupt’ the 2016 election, prosecutor alleges as hush money trial gets underway

Trump tried to illegally influence the 2016 election by preventing damaging stories about himself from becoming public, a prosecutor said.

2 hours ago

Associated Press

Biden will send Ukraine air defense weapons, artillery once Senate approves, Zelenskyy says

WASHINGTON (AP) — President Joe Biden told Ukrainian President Volodymyr Zelenskyy on Monday the U.S. will send badly needed air defense weaponry once the Senate approves a massive national security aid package that includes $61 billion for Ukraine. Zelensky said in a posting on X that Biden also assured him that a coming package of […]

4 hours ago

Associated Press

The fatal shooting of an Ohio officer during a training exercise being probed as a possible homicide

COLUMBUS, Ohio (AP) — The fatal shooting of an Ohio officer during a training exercise at a state corrections department facility earlier this month is being investigated as a possible reckless homicide, according to a published report. The Columbus Dispatch said the information is included in a heavily redacted 18-page report it received from the […]

4 hours ago

supreme court homelessness...

Lindsay Whitehurst

With homelessness on the rise, the Supreme Court will weigh bans on sleeping outdoors

The Supreme Court will consider whether banning homeless people from sleeping outside when shelter space is lacking amounts to cruel and unusual punishment.

4 hours ago

Social Security cost-of-living adjustment coming — but it won’t be as big as this year’s