Why Inflation is Not the Only Thing Seniors Should be Concerned About
Social Security recipients received an 8.7 percent cost-of-living adjustment (COLA) this year. It was the largest increase in about 40 years. While that benefits boost came at the perfect time when so many retirees were struggling with the rising costs due to inflation, experts caution don’t expect a repeat in 2024. According to a report by The Motley Fool, all indications are that the Social Security COLA will probably be somewhere around 3 percent next year.
We won’t know for sure until October. That’s when Social Security calculates its annual COLA based on third-quarter data from the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), a subset of the broader Consumer Price Index.
Better COLA Calculator
The Seniors Trust believes seniors would be better off if we used the Consumer Price Index for the Elderly, or the CPI-E, instead of the Consumer Price Index for Urban Wage Earners and Clerical Workers, or the CPI-W, to calculate COLA. The CPI-E index specifically tracks the spending of households with people aged 62 and older. It places greater value on rising costs of expenses unique to seniors such as housing, healthcare, and medicine. This would provide a much fairer cost-of-living adjustment for retirees. The change would be made if Congress enacts the Social Security Expansion Act.
Another Cause for Concern
Inflation is not the only factor that could impact how much Social Security recipients receive next year. They also need to keep a close eye on Medicare premiums, specifically how much Medicare Part B premiums increase.
In addition to the big COLA, older Americans are benefiting financially this year because Medicare premiums stayed pretty stable. The concern is if they jump this year. The Motley Fool article warned that if seniors receive a small COLA coupled with a large Medicare hike, many recipients could wind up in a tough position next year.
