Social Security COLA rate is at 3.2 percent: Social Security recipients will get a 3.2 percent raise next year- less than this year’s, but a sign that inflation is abating.
Social Security Is Going Up…
Each year, recipients of Social Security receive a cost of living allowance (COLA) adjustment. That adjustment is tied to inflation, in the form of the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).
This week, the Social Security Administration announced that the COLA raise, starting in January 2024, will be 3.2 percent. That’s down from the 8.7 percent raise recipients got in January of this year, the largest since the 1980s, which came as a result of the major inflation in 2022.
Per the AP, the average Social Security recipient will receive about $50 more per month starting in January.
“Social Security and SSI benefits will increase in 2024, and this will help millions of people keep up with expenses,” Kilolo Kijakazi, Acting Commissioner of Social Security, said in the announcement.
“Compared to last year’s 8.7% increase, this is going to feel small and the perception is that its not keeping up with the inflation and the higher costs that retirees are still seeing,”Martha Shedden, president of the National Association of Registered Social Security Analysts, told the AP of the increase.
“Retirees can rest a little easier at night knowing they will soon receive an increase in their Social Security checks to help them keep up with rising prices,” AARP CEO Jo Ann Jenkins said Thursday, per the AP. “We know older Americans are still feeling the sting when they buy groceries and gas, making every dollar important.”
The Senior League, which follows Social Security and COLA increases closely, predicted on September 13 that the increase would, indeed, be 3.2 percent.
The other question is when Social Security will run out. According to the latest annual Trustees report, released in the spring, the trust fund will lose the ability to pay out full benefits starting in 2033. That would result in reduced benefits going out, starting then.
“Since last year’s reports, projected long-term finances of the OASI and the OASDI Trust Funds worsened due to the Trustees revising down the expected levels of gross domestic product (GDP) and labor productivity by about 3 percent over the projection window,” the spring report said. “The Trustees made this change as they reassessed their expectations for the economy in light of recent developments, including updated data on inflation and U.S. economic output.”
In order to keep full benefits coming, Congress would need to take some type of action, to change how benefits are calculated, or to reduce them altogether. During the previous Congress, several bills were introduced, although none of them moved forward. That has also been the case in the divided, and often chaotic current Congress.
During the 2022 midterm campaign, Democratic candidates often accused Republicans of wanting to reduce Social Security benefits, and there are indications that the tactic was an effective one.
Social Security checks, meanwhile, are not affected by a potential government shutdown, since they are paid for by the trust funds and not from discretionary spending.
Kijakazi has been the acting head of Social Security since the summer of 2021, after the Biden Administration dismissed Trump holdover Andrew Saul.
The president announced in July that Martin O’Malley, the former Baltimore mayor, Maryland governor, and presidential candidate, had been nominated as the permanent SSA commissioner, although no action has yet been taken on his nomination.
In 2015, when O’Malley was running for president, Vox reported that he had called for boosts to Social Security even beyond what his Democratic Socialist then-opponent, Bernie Sanders, was proposing.
O’Malley proposed “immediately boosting monthly benefits in a progressive manner for all retirees,” a “caregiver credit,” and a mandate that “all employers with 10 workers or more have their employees all contribute to an IRA by default.”
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Stephen Silver is a Senior Editor for 19FortyFive. He is an award-winning journalist, essayist and film critic, who is also a contributor to the Philadelphia Inquirer, the Jewish Telegraphic Agency, Broad Street Review and Splice Today. The co-founder of the Philadelphia Film Critics Circle, Stephen lives in suburban Philadelphia with his wife and two sons. Stephen has authored thousands of articles over the years that focus on politics, technology, and the economy for over a decade. Follow him on X (formerly Twitter) at @StephenSilver, and subscribe to his Substack newsletter.