By: Russ Kamp, Managing Director, Ryan ALM, Inc.

Earlier this year, I published a post titled, “What You Might Expect From Social Security in 2024” that attempted to project the possible COLA in 2024 for recipients of Social Security benefits. At the time (8/11/23), it was looking as if the increase would be about 3%, as inflation had subsided to about 3.2%. With the passage of time, we have a concrete answer, as the SSA announced that the average monthly Social Security check would increase by 3.2% or $59 to $1,906 ($22,872 per year). This increase is certainly much smaller than those which SS recipients received for 2022 and 2023. Worse, it doesn’t match the current impact of inflation that touched 3.7% on an annual basis through September.

As I’ve discussed in posts related to Social Security through the years, the COLA is based on inflation for the 3 summer months. In addition, the CPI-U is used to measure the inflationary environment, which doesn’t truly reflect the inflation rate experienced by the more senior members in our country. The CPI-E would be a more appropriate index as healthcare costs carry a greater weight for those 62 years old and up. The CPI-E for the prior 12 months is 4.14%, while inflation measured using the CPI-U ran 3.69%. That 0.45% is meaningful when one is living on a fixed income.