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Social Security Update: The Most Recent 2024 COLA Estimate Is Higher

Social Security COLA
Social Security COLA; Source-MARCA

The most recent Social Security (COLA) cost-of-living adjustment projection for 2024 increased, even though inflation in the United States continued to decline in June, reaching its lowest level in more than two years. According to information issued on Wednesday by the U.S. Bureau of Labour Statistics, inflation as a whole in June 2023 increased by 3% over the prior year. Since March of 2021, that was the most minute 12-month gain. The index for shelter, which reflects growing housing and rental expenses, was one of the major drivers of the gain. This has an especially negative effect on seniors on fixed incomes.

Annual Inflation Rate Increased Marginally

A non-partisan seniors advocacy organization, The Senior Citizens League, predicts that the Social Security COLA for 2024 will be 3% based on the June BLS statistics. The COLA estimate for the previous month was 2.7%, thus this estimate is higher. The Consumer Price Index for Urban Wage Earners & Clerical Workers (CPI-W), the index used to calculate the annual COLA, gained just 2.3% year over year in June, according to The Senior Citizens League. However, the average annual inflation rate increased marginally, which had an impact on the COLA calculation.

Because there remain a further three months of inflation statistics to emerge until the final estimated 2024 COLA is released in October, the COLA forecast could alter once more. The CPI-W, which measures inflation, is used to calculate the COLA for the third quarter of 2017 (July, August, and September). A 3.0% COLA would be a significant decrease from this year’s COLA of 8.7%, which was the largest since the early 1980s, as previously stated by GOBankingRates. Social Security recipients can credit 2022’s high inflation rate for this year’s higher benefits.

Increase In Average Monthly Benefit

As per The Senior Citizens League, a 3.0% COLA would result in an increase of around $53.60 in the average monthly benefit, which now stands at $1,787.00. Social Security recipients “won’t learn the bottom line” until the premiums of Medicare Part B are revealed, though. Most beneficiaries have their Part B premiums taken automatically, and those deducted expenses can have a significant impact.

The Medicare coverage of another brand-new Alzheimer’s medicine, lecanemab, also known by the name Leqembi, may be one of the greatest “significant” new expenditures. Without insurance, it’s projected to cost $26,000 a year. According to spending projections, Johnson said, “We project that the drug and associated Part B services needed for administering and tracking the patient for hazardous adverse effects would add approximately 5 dollars every month for the premium of Part B for everyone, raising the premium of 2024 to around $179.80 per month.”

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