Social Security COLA to drop in 2023, analysts predict

(NEXSTAR) – Social Security recipients shouldn’t expect 2024’s cost-of-living adjustment (COLA) to be as significant as 2023’s, despite warnings that beneficiaries are losing their purchasing power.

“The 2024 COLA could be around 3.1%,” Mary Johnson, the Social Security and Medicare policy analyst for the Senior Citizens League, said in a news release issued last week.

The Senior Citizen’s League (TSCL), a nonpartisan senior advocacy group, has for years based its estimations of upcoming COLA increases on data from the Bureau of Labor Statistics and specifically its Consumer Price Indexes — the same data which is ultimately used by the Social Security Administration to determine its annual COLA increases.

The 2023 increase, at 8.7%, was the largest COLA increase in over four decades, partially thanks to supply-chain disruptions which fueled soaring inflation amid the pandemic. But analysts with TSCL are worried that cooling inflation — or at least the appearance of cooling inflation — will result in a smaller 2024 COLA increase that could have detrimental effects on beneficiaries.

“Inflation is moderating, but a lower inflation rate has not necessarily meant that prices have decreased,” TSCL writes in a study published ear...