Social Security COLA 2024 estimates rise in unexpected twist

[samhexum]

Social Security recipients finally have something to cheer about: the forecast for next year’s Social Security increase edged up on Wednesday even after the government said inflation cooled further in June.  YIPPIE!

Lower inflation is generally welcomed because people are regaining their purchasing power. but Social Security recipients, used to seeing their potential cost-of-living adjustment (COLA) decline with slower inflation, got an unusual extra surprise. COLA is estimated at 3% next year, according to a forecast from The Senior Citizens League, a nonprofit seniors group. That’s much less than the four-decade high of 8.7% COLA in 2023 but above last month’s estimate for a 2.7% increase for 2024.

The average trailing twelve-month inflation rate that the league uses to project inflation in coming months rose slightly, affecting "our COLA estimate rising from 2.7% last month to 3% based on the June data," said Mary Johnson, Social Security and Medicare policy analyst at The Senior Citizens League.

The average monthly check for Social Security beneficiaries was $1,701.62 in May, according to SSA. A 3% COLA would mean about an extra $51 each month.

Cautious optimism

Ebbing inflation coupled with a higher COLA is music to a Social Security recipient's ear, but Johnson warned that this could all change again.

"There are still three more months of data before the COLA is announced in October and this estimate could change," she said. COLA is determined using the average inflation of July, August and September and then comparing it to the year-ago figure. The percentage difference between the two is the amount of the COLA.

Additionally, Social Security recipients won’t learn the bottom line until the Medicare Part B premiums are announced. Part B premiums are automatically deducted from most beneficiaries’ Social Security benefits.

"In many years, the Part B premium increase can take most, or even all, the COLA, leaving little else to cover other rising prices," Johnson said.

In March, Medicare Trustees forecasted monthly Part B premiums would increase to $174.80 in 2024 from $164.90 this year.

"But that’s an estimate, and it doesn’t include any significant new costs that come up after the estimate is released," Johnson said. "One of the most significant new costs could be Medicare’s coverage for a new Alzheimer’s drug —lecanemab, known by the brand name Leqembi, which is expected to cost $26,000 per year without insurance."

The next COLA will be announced in October and be effective starting January 2024.

https://www.aol.com/social-security-cola-2024-estimates-180424412.html

[+ augustus]

On 7/13/2023 at 3:22 PM, samhexum said:

The average monthly check for Social Security beneficiaries was $1,701.62 in May, according to SSA.

Damn, that ain't much.  

[BuffaloKyle]

7 hours ago, augustus said:

Damn, that ain't much.  

I'll take it! I'm 36 so by the time I qualify social security won't exist anymore.

[+ augustus]

5 hours ago, BuffaloKyle said:

I'll take it! I'm 36 so by the time I qualify social security won't exist anymore.

You might be right.

[handiacefailure]

On 8/4/2023 at 1:46 PM, augustus said:

Damn, that ain't much.  

Agree.   I looked at my SSA earnings statement the other day and if I am disabled today my monthly payment will be a lot more than if I retire at 62 and only a little less than if I retire at 67   Crazy since I won't be working all those years if I were disabled.   Of course if I was on disability I'd hae to spend down all my assets first 

[Rudynate]

14 minutes ago, handiacefailure said:

Agree.   I looked at my SSA earnings statement the other day and if I am disabled today my monthly payment will be a lot more than if I retire at 62 and only a little less than if I retire at 67   Crazy since I won't be working all those years if I were disabled.   Of course if I was on disability I'd hae to spend down all my assets first 

Or hire an estate planning attorney to set up a Medicaid asset protection trust.

[Jim_n_NYC]

Except for '21 and '22, if the next cola is 3.1%, it'll be the highest since 2011.  So, historically not all that bad.  With compounding and the 5.9% and 8.7% of the last 2 years, the dollar amount rise will be higher than it otherwise would have been if inflation had stayed low.

[samhexum]

19 hours ago, handiacefailure said:

Of course if I was on disability I'd hae to spend down all my assets first 

One of the many benefits of being poor.

[handiacefailure]

20 hours ago, Rudynate said:

Or hire an estate planning attorney to set up a Medicaid asset protection trust.

Not sure if that protects your assets though if you go on disability or just medicaid.

My lawyer recomended against it and told me him and his husband (also a lawyer) both have revcoable living trusts and thats how he set mine up.

For a trust to protect your assets against medicaid, it has to be irrevocable and you have to have someone else as a trustee.   I don't want my parents in their 80s to deal with it and I'll probably outlive them and don't want my sister (who is on disability) doing it and if I have the bank as the trustee it will mean paying them 10% of my net worth for a fee each year

My parents have that kind of trust (they are past the five year look back) and I'm their trustee and if they go to sell their house I have to sign off on the deed, they moved some investments around and I had to sign and when they sold the gas company an easement last year I had to sign on that.   I don't want anyone having to deal with my investments.

And my lawyer made a great point when I did my estate work (and Suze Orman talked about it a few weeks ago) is that a private care nursing home is a lot better and since I have no kids to leave the money to, do I really want to spend my final years in a substandard medicaid nursing home . 

[+ augustus]

20 hours ago, Jim_n_NYC said:

Except for '21 and '22, if the next cola is 3.1%, it'll be the highest since 2011.  So, historically not all that bad.  With compounding and the 5.9% and 8.7% of the last 2 years, the dollar amount rise will be higher than it otherwise would have been if inflation had stayed low.

Ahhhhh...not really.  Inflation compounds too.