The good news for Social Security beneficiaries is finally here: Even though the government reported that inflation continued to fall in June, the prediction for the Social Security rise for the following year grew somewhat on Wednesday.
After peaking at 9.1% in June 2022, annual inflation dropped to 3% from 4% in June. It had also been the smallest rise since the beginning of 2021, mostly as a result of a 17.7% drop in energy costs, despite a 0.6% increase in monthly energy. Despite being down from May’s 6.7% yearly increase, food prices climbed by 5.7%. Rents, which are included in a shelter, increased 7.7% over the previous year, which was still less than May’s 8% increase.
Social Security Estimates May Vary Since The Data Arrived Is Not Complete
Since individuals are recovering their buying power, lower inflation is typically appreciated. However, Social Security claimants, who are accustomed to looking at their prospective COLA drop with slower inflation, received an added surprise that was uncommon. The SCL, a nonprofit organization for seniors, predicts that COLA will be 3% next year. This is higher than last month’s prediction of a 2.7% increase for 2024 but far lower than the fourth-year high COLA of 8.7% in 2023.
A Social Security beneficiary will find ebbing inflation and a greater COLA to be welcome news, but Johnson cautioned that things might change once more.
Before the COLA is released in October, there still are about three months of data yet to come, so this estimate may vary, she added. The COLA is calculated by averaging the inflation rates for September, August, and July and comparing the result to the previous year. The amount of the COLA is determined by the percentage difference between the two.