The 2024 Social Security cost-of-living adjustment (COLA) hasn’t even kicked in yet, and already there is a major pushback against it from seniors who don’t think it will be enough to cover essential items. Nearly two-thirds of Social Security recipients polled in one recent survey are dissatisfied with the 3.2% COLA for 2024, while more than two-thirds in another survey say their monthly bills for certain essentials are already 10% higher than a year ago.
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One of the surveys, released this week, was conducted by The Senior Citizens League (TSCL), a nonpartisan seniors advocacy group. Its research found that inflation rates for certain key budget items are rising at least two times faster than the 3.2% COLA despite a continued decline in the overall inflation rate this year.
“Housing, motor vehicle insurance, the cost of hospitals and care of invalids at home — these are the savings-draining black holes even when inflation is low,” Mary Johnson, TSCL’s Social Security and Medicare policy analyst, said in a press release. “Yet these are the very categories seeing the most persistent and painful inflation right now.”
More than two-thirds of older adults polled by TSCL said their monthly budget for essential items such as housing, food and prescription drugs is 10% higher now than it was a year ago,
A separate survey conducted by public interest law firm Atticus found that 62% of seniors collecting Social Security benefits are dissatisfied with the 3.2% COLA for 2024. Nearly three in five seniors collecting Social Security are “struggling financially,” according to the survey, while nearly two in five plan to seek employment due to the modest 2024 COLA increase.
The annual Social Security COLA is intended to help seniors deal with rising consumer prices. It is based on the percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) in the third quarter.
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A COLA of 3.2% would add an extra $57.51 a month to the average Social Security retirement benefit, which was $1,797.23 a month as of November 2023, according to the Social Security Administration. That’s a significant drop from the average monthly increase of about $146 based on the 2023 COLA of 8.7%.
Here are three reasons the 2024 COLA could be financially inadequate for seniors.
It Won’t Cover Price Increases
The Senior Citizens League noted that prices for several essential budget items are rising at a much faster rate than 3.2%, based on data from the U.S. Bureau of Labor Statistics. Here’s a look at some of those items and their inflation rate compared with last year:
- Motor vehicle insurance: up 19.2% from a year ago
- Outpatient hospital services: up 7.30%
- Rent: up 6.90%
- Homeowners’ costs: up 6.70%
- At-home invalid care: 6.50%
Many Seniors Already are Struggling Financially
Although the annual COLA is supposed to provide a financial boost to help Social Security recipients deal with inflation, many are behind financially to begin with — and a 3.2% COLA will do little to change that. The Atticus survey revealed the following:
- Almost 60% of seniors already report financial difficulties with their current Social Security benefits.
- 70% of single seniors struggle financially with their existing Social Security income.
- Nearly 40% of seniors plan to find work due to the modest COLA increase.
Higher Medicare Premiums Will Cut Into COLA
When Medicare Part B premiums go up, the COLA impact goes down — and that’s what will happen in 2024. In October, the Centers for Medicare and Medicaid Services said the standard monthly premium for Medicare Part B will be $174.70 for 2024, up from $164.90 this year.
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This article originally appeared on GOBankingRates.com: Social Security: Nearly Two-Thirds of Seniors are Unhappy with 2024 COLA — 3 Reasons It’s Financially Inadequate
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