July 12, 2024

Surviving Retirement: The Struggle of Social Security COLA in an Inflation Era

Image Credits: Kevin Dietsch / Getty Images

Retirees relying on Social Security might feel the pinch more than ever in the upcoming year. There must be more than a seemingly minor benefit bump to shield them from the relentless onslaught of inflation, leaving many struggling to make ends meet.

According to a recent Atticus survey, 62% of Social Security recipients are unsatisfied with the mere 3.2% increase scheduled for 2024. Financial strain has become a constant companion for almost three in five seniors, amplifying worries about everyday expenses like food, rent, and medical care. In response, about 20% contemplate re-entering the workforce just to cope.

Rising costs for essentials like utilities, insurance, heating, and food have turned retirement into a juggling act. Even though the increase might push the average retiree benefit of $1,907 up by $59 monthly, concerns about navigating through persistent inflation persist.

The stark contrast with the 8.7% surge in 2023, the highest in forty years, only exacerbates this year’s modest increase. However, this modest bump is more generous than the average 2.6% uptick over the past two decades.

Despite a slight dip from the peak of 9.1%, the consumer price index remains stubbornly above the Federal Reserve’s 2% target, showing a staggering 17.23% surge from January 2021 before the inflation crisis kicked in.

Another survey by the Senior Citizens League echoes these sentiments, with 68% of retirees stating that their household expenses continue to soar despite a slight ease in inflation. It’s a troubling situation that’s been ongoing for the past year.

Mary Johnson, a Social Security and Medicare policy analyst at the Senior Citizens League, highlighted the prevailing concern: “Worry that retirement income won’t be enough to cover the cost of essentials in the coming months is a top concern of 56% of survey respondents.”

This annual Social Security adjustment is rooted in the Consumer Price Index for Urban Wage Earners and Clerical Workers, reflecting the months of July, August, and September.

As we approach 2024, the challenge for retirees to make ends meet looms. The question remains: will this modest increase suffice in a landscape of persistent, soaring prices?

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