The Social Security Administration (SSA) announced this week that Social Security and Supplemental Security Income (SSI) payments will see a 3.2% cost of living adjustment (COLA) in 2024.
Increased payments will start in January for approximately 66 million Social Security beneficiaries and 7.5 million people who receive SSI. Some SSI program beneficiaries also receive Social Security benefits, SSA noted.
While a COLA of this level will be welcome for program beneficiaries, the overall increase falls short of matching inflation seen in the U.S. economy in 2023.
According to data from the U.S. Bureau of Labor Statistics, the consumer price index (CPI) rose 3.7% year over year through September.
But a recent survey conducted by The Senior Citizens League (TSCL) detailed that older adults remain pessimistic about their financial outlooks. That’s because the condition of the trust fund backing the benefit program requires legislative action to restore it to solvency.
What’s more, current projections indicate that benefits may need to be reduced sometime in the 2030s.
“Sixty-eight percent of survey participants report that their household expenses remain at least ten percent higher than one year ago, although the overall inflation rate has slowed,” according to survey results. “This situation has persisted over the past 12 months.”
An additional 56% of survey respondents worry that retirement income will not be enough to cover the cost of living essentials in the coming months. Additionally, nearly 60% of all survey respondents relayed serious concerns about the potential for benefit cuts from entitlement programs.
“Over the past year, benefit cuts and trims have affected a large percentage of older Americans who can least afford them — low-income households,” the results found.
Beneficiaries say they have been squeezed further by tax obligations. Twenty-six percent of survey participants who have received Social Security payments for more than three years reported paying taxes on at least a portion of their benefits for the first time during the 2023 tax season.
“Because Social Security recipients received an even higher COLA of 8.7% in 2023, we expect more beneficiaries to become liable for federal income taxes on their Social Security benefits for the first time in the upcoming 2024 tax season,” according to the TSCL survey findings.
Lawmakers have debated ways to improve its solvency, including raising the retirement age, which experts say could negatively impact today’s seniors. However, entitlement programs remain a polarizing issue among lawmakers from both political parties.
