Social Security recipients will likely see a much smaller increase in benefits this coming year.

In 2023, beneficiaries saw a record 8.7% boost, the highest increase in four decades. Using current inflation data, however, advocacy group The Senior Citizens League estimates recipients will see a cost-of-living adjustment of 3.1% in 2024.

The 3.1% COLA would be the lowest since 2020 when benefits edged up by only 1.3%. In 2021, benefits increased 5.9%.

COLA increases are determined by the Consumer Price Index showing the year-over-year change in prices for goods and services for July, August and September, so the TSCL figures are only estimates at this point. It comes as inflation is moderating but, as the group points out, that does not necessarily translate to lower prices.

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“This year the study found that the oldest adults, especially those (age 85 and older) who retired before 2000, have lost 36 percent of their buying power. These retirees would need an extra $516.70 per month ($6,200 in 2023) to maintain the same level of buying power as in 2000. This study confirms that the prices older consumers are paying simply are not growing as fast as a year ago, but many prices on key items through February 2023 remain stubbornly high,” the League said in a press release.

Between January 2000 and February 2023, Social Security COLAS increased benefits by 78%, averaging 3.4% annually. But the cost of goods and services purchased by typical retirees rose by 141.4%, the TSCL said, averaging about 6.2% annually over the same period. For every $100 a retired household spent on groceries in 2000, that household can only buy about $64 worth today.

https://www.cbpp.org/research/social-security/top-ten-facts-about-social-security

About 66 million people – or about 1 in every 5 U.S. residents – collect Social Security. And while older adults make up about 80% of beneficiaries, the other 20% received Social Security Disability Insurance or were young survivors of deceased workers.

The average recipient receives $1,782 per month, or about $21,384 per year.