Social Security Administration slashes 2024 COLA boost to 3.2% as inflation pressures ease

The U.S. Social Security Administration slashed its cost-of-living adjustment for 2024 Thursday, reflecting the sharp pullback in overall inflation, 

The near 65 million Americans receiving social security payments will see a 3.2% increase in the cost-of-living (COLA) for benefits beginning in January, the SSA said, with increased payments to approximately 8 million SSI beneficiaries beginning on December 30. The COLA increase could translate into an additional $59 payment to the $1,705.79 average monthly benefit total. 

That 2024 increase would mark the smallest pensioner boost since the pandemic, and comes in firmly shy of the 8.7% increase, which was the largest since 1981, implemented last year.

COLA changes are made to ensure that the purchasing power of Social Security benefits aren't eroded by inflation, which was last pegged at 3.7% in September but has been as high as 6% earlier this year. 

"Retirees can rest a little easier at night knowing they will soon receive an increase in their Social Security checks to help them keep up with rising prices," AARP Chief Executive Officer Jo Ann Jenkins said in a statement. 

"We know older Americans are still feeling the sting when they buy groceries and gas, making every dollar important. Social Security has been the foundation for financial security for hundreds of millions of people in our nation - and today's announcement shows that it's continuing to deliver on this promise," she added.

 The headline consumer price index for September was pegged by the Commerce Department at 3.7%, matching the prior month's tally but coming in just ahead of Wall Street's 3.6% forecast, powered in part by rising oil and energy prices.

On a monthly basis, the index showed inflation up 0.4%, down from the 0.6% recorded in August and modestly above the Street's 0.3% estimate for September.

So-called core inflation, which strips out volatile components like food and energy, slowed to 4.1%, the lowest in two years. The monthly reading of 0.3% matched Wall Street forecasts. 

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