Inflation appears to be on the wane, but that good news likely hides an unpleasant downside for Social Security recipients, according to one advocacy group.
A slowdown in the rise of prices as tracked by the federal government’s Consumer Price Index for Urban Wage Earners and Clerical Workers means next year’s Social Security cost-of-living adjustment (COLA) is likely to be much lower than the 8.7% increase for 2023, according to the Senior Citizens League.
As of May 10, the league forecasts the COLA for 2024 to fall significantly, to 3.1%.
Recently released government data shows that in April, prices rose 4.6% year over year and 0.6% month over month. While that means prices are still climbing, the rate of increase has fallen sharply from the steady upward trend that occurred in 2022.
As inflation cools, it becomes more likely that Social Security recipients will see a smaller COLA next year.
While the Senior Citizens League acknowledges that inflation is moderating, it emphasizes that “a lower inflation rate has not necessarily meant that prices have come down.”
In a press release, the league refers to research it published earlier this year and says that the oldest adults — especially those 85 and older who retired before 2000 — have lost 36% 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 Senior Citizens League says that this year, a rise in the cost of several items has especially eroded the purchasing power of retirees on Social Security. Those items are:
- Food
- Electricity
- Rental housing
- Repair and maintenance costs of motor vehicles
- Dental care
Eggs were the single item that rose most in cost, with the price up 332% since 2000.
Do you need help keeping rising prices at bay? Check out “10 Sure-Fire Ways to Beat Inflation.”
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