What Biden Admin’s Cost of Living Update Means for Social Security Recipients

wavebreakmedia / shutterstock.com
wavebreakmedia / shutterstock.com

With the economy in a seemingly downward spiral, it’s not just the cost of living that people are increasingly concerned about. It’s also retirement and how much Social Security benefits may be received.

For those of you not in the know, cost of living increases are not necessarily a bad thing for retirees receiving Social Security. You see, as the cost of living nationwide goes up, the government gives a boost or adjustment to Social Security payouts to account for that.

In 2023, for instance, with the cost of living and inflation rates considerably higher, recipients received an 8.7 percent boost.

As Karla Abbott, who plans to retire next spring, says, “The increases will be helpful, certainly to those of us who are still doing the math on retirement.”

Abbott explained that she’s been saving for retirement since she was 18. However, given the cost of living and expenses of today, she’s still not certain it will be enough. So, any little bit extra the government can give her will be extremely helpful.

But the economy, with an election coming up right around the corner, is starting to plateau a bit, meaning consumer prices are easing up a bit. Sure, they’re still far higher than what they used to be for most of us.

But at least inflation isn’t as high, and certain markets seem to balance out some.

Unfortunately for Social Security recipients or soon-to-be retirees like Abbott, it also means the bump or cost of living increase they experience yearly won’t be all that substantial.

According to an announcement by the Social Security office Thursday, the boost for 2024 will only be 3.2 percent.

Naturally, this means those like Abbott won’t get as much as last year or the previous year. So it’s kind of like getting a pay cut. Although, the boost is still more than they would get without the cost of living increases.

Of course, there are other problems with Social Security, namely that based on current funding, there are only about ten or so more years in which the department will be able to pay out benefits in full.

According to the current program, roughly $1.4 trillion is paid out in benefits each year to over 71 million Americans, including those with low incomes and disabilities. But it will only be able to cover those costs until about 2033 when the trust fund currently supporting those payments will be officially depleted, according to the annual Social Security and Medicare trustees report released in March.

This means that starting at the beginning of 2033, only about 77 percent of scheduled benefits will be paid to recipients.

Naturally, this means the program and concerned individuals are looking for solutions, which must be passed through Congress.

And the current state of division, not to mention the fact that the House of Representatives doesn’t even have a Speaker at present, no one has much confidence of anything going through any time soon.

As Mary Johnson, a Social Security and Medicare policy analyst at the Senior Citizens League, says, Congress “does not have any record of successfully and timely making changes to Social Security.”  The last time was in 1983, and “we were far less divided” then.

Of course, that doesn’t mean she or those like Jo Ann Jenkins of AARP are giving up.

According to Jenkins, she is constantly “urging Congress” to work together in whatever way possible to “keep Social Security strong and to provide American workers and retirees with a long-term solution that both current and future retirees can count on.”

Here’s to hoping they come up with something that works, and soon.