After several speculations, we now know the actual increase that the cost-of-living adjustment will have and recover in Social Security payments beginning in January 2024.
This announcement, which took place this morning, confirmed what the experts were saying about inflation in the United States.
By 2024, payments will rise by 3.2%. In other words, the COLA for 2024 is 3.2%.
This payment is well below the current rate of 8.7%, but higher than the average of the last two decades, which was 2.6%. Likewise, the rise in the main products such as food, energy and fuel, will not be faced with this increase.
Taking into account the average payment in the USA, 1.858 dollars, this COLA would increase by approximately 50 dollars, remaining at 1.903 dollars. Anyway, we will be talking about this in the next articles in Tododisca.
COLA – Cost of Living Adjustment
The COLA, tethered to the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), has drawn criticism for its potential misalignment with the actual expenditure patterns of the elderly. Johnson underscores a disparity in healthcare spending, with the CPI-W allocating about 7% of income to healthcare, while surveys indicate that older adults may expend between 12% and 24%.
Despite the tangible increases in COLA over the past two years, the poverty net seems to be widening its grasp on the elderly population. U.S. Census data reveals a concerning uptick in poverty among seniors, escalating from 1 in 10 in 2021 to 1 in 7 last year. The looming 2033 depletion of the Social Security trust fund, which could precipitate a slashing of benefits by 20% to 25%, casts a longer shadow over the financial stability of future retirees.
In a statement, Jo Ann Jenkins, AARP Chief Executive Officer, emphasized the necessity of bipartisan efforts in Congress to fortify Social Security and furnish American workers and retirees with a durable, long-term solution. Jenkins asserted, “Americans work hard to earn their Social Security, and it’s only fair for them to get the money they deserve.”
As the nation navigates through the economic ripples of the pandemic and beyond, the adequacy of the COLA in preserving the purchasing power of Social Security beneficiaries remains under the microscope, entwining policy, economics, and the livelihoods of millions in a complex fiscal tapestry.