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Could Social Security COLA Be Cut in 2024?

Government Affairs

Apparently it’s never too early to start thinking about the cost-of-living adjustments for Social Security.

While at this point such things seem to be highly speculative (to say the least), February inflation — as measured by the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), the same index that’s used to calculate the COLA — has dipped to (a still robust) 5.8% from one year ago, according to the Senior Citizen’s League

The organization, which says it is one of the nation’s largest nonpartisan seniors groups, garnered headlines (including ours) last year tracking the potential impact of rising inflation on the annual COLA adjustment for Social Security — which wound up being 8.7%.  

There were only three other times since the start of automatic adjustments that it was higher — 9.9% in 1979, 14.3% in 1980 and 11.2% in 1981. The next highest after those three years was in 1982, when it was 7.4%.

All that said, the Senior Citizen’s League noted last week[1] that “Long term trends indicate a significant drop in the average monthly rate of inflation over the past 12 months and suggests that the next annual cost of living adjustment, in 2024 could drop below 3%.”

We’ll see.


[1] However, the purpose of the update was to unveil the results of a new survey of seniors that found that 58% of survey participants think the income thresholds that subject Social Security benefits to taxation are long overdue for an adjustment to today’s dollars. Considering that leaving those unadjusted for inflation subjects about half of current recipients to being taxed on those Social Security benefits, one has to wonder that only 58% think that should change.