Jul 25, 2023
New estimates are in for the Social Security cost of living adjustment (COLA) in 2024.
Using inflation data from June, The Senior Citizens League (TSCL) says the COLA could be 3% next year. This would increase the average monthly benefit for Social Security recipients by $53.50, from $1,787 to $1,840.
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When will the 2024 COLA be announced?
The official 2024 COLA will be announced in October and will be based on inflation data from July, August and September of this year.
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If inflation continues to slow like it did in June, the COLA could end up being lower than the estimated 3%.
Is 3% enough?
The impact of any increase to the COLA will depend on what happens to Medicare Part B premiums, which are expected to rise by around $10 per month or more in 2024, according to the 2023 Medicare Trustees Report.
Medicare premiums went down in 2023, giving seniors more breathing room — but that relief will be short-lived. The report estimates the average annual Part B premium will increase from $164.90 to $174.80 in 2024.
TSCL says insurance premiums could climb even higher due to “significant new costs”.
According to TSCL, Medicare’s coverage of a new Alzheimer’s drug could add another $5 onto the Part B premium for all recipients, potentially raising the 2024 premium to about $179.80 per month. The drug — Lecanemab — is expected to cost $26,000 per year for those without insurance.
If inflation continues to slow, the 2024 COLA could fall short of Medicare Part B premium increases, potentially leaving many who rely on Social Security benefits to make up the difference next year.
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Bethan Moorcraft is a reporter for Moneywise with experience in news editing and business reporting across international markets.
