Small Social Security COLA could leave retirees struggling to get by next year

The modest cost-of-living bump in Social Security benefits next year could leave many retirees struggling to get by as they continue to battle still-high inflation that has rapidly eroded their purchasing power. A new survey published by Atticus found that an overwhelming percentage of seniors collecting Social Security – about 62% – are dissatisfied with the 3.2% payment increase they will receive in 2024. In fact, nearly three in five seniors reported struggling financially as the cost of everyday necessities like food, rent and medical care remains uncomfortably high, while about 20% of seniors receiving Social Security plan to seek employment next year due to the small increase. Retirees reported concerns over rising utility, insurance, heating and food costs. More than 66 million Americans collecting Social Security will receive the bigger payments beginning in January. The payment boost marks a steep decline from 2023, when recipients received an 8.7% bump, the highest in four decades. However, it remains higher than the 2.6% average increase recorded over the past two decades. An increase of this magnitude will raise the average retiree benefit of $1,907 by about $59 per month. But even with the payment increase, retirees say they are worried about keeping up with stubbornly high inflation. Although the consumer price index has fallen considerably from a peak of 9.1%, it remains above the Federal Reserve’s 2% target. On top of that, prices are up a stunning 17.23% when compared with January 2021, before the inflation crisis began. A separate survey conducted by the Senior Citizens League found that 68% of retirees reported that their household expenses remain higher than one year ago, even though inflation has eased. They said this situation has persisted over the last year. “Worry that retirement income won’t be enough to cover the cost of essentials in the coming months is a top concern of 56% of survey respondents,” said Mary Johnson, Social Security and Medicare policy analyst at the Senior Citizens League. The annual Social Security change is calculated based on the consumer price index for Urban Wage Earners and Clerical Workers, or the CPI-W, from July, August and September.