Social Security COLA for 2024 Set at 3.2%

By John Manganaro

News October 12, 2023 at 08:35 AM

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The Social Security Administration's 2024 cost-of-living adjustment for Social Security beneficiaries will be 3.2%.

The annual COLA is based on inflation data for the third quarter, through September.

The consumer price index data for September, released Thursday by the Bureau of Labor Statistics, shows inflation ran at 3.7% over the past 12 months before a seasonal adjustment and was up 0.4% during September on a seasonally adjusted basis.

While smaller than 2023's near-record increase of 8.7%, a COLA of this size is well above the 2.6% average over the past 20 years.

How the Social Security COLA Is Calculated

The Social Security Administration uses average inflation in the third quarter, based on the consumer price index for urban wage earners and clerical workers (CPI-W), to calculate the benefit adjustment for the following year.

The 3.2% figure for 2024 is roughly in line with analysts' projections made during the year.

In addition to trailing this year's COLA, the final figure for 2024 is also significantly lower than the 5.9% COLA received by Social Security beneficiaries during 2022, though it is much higher than the 1.3% raise beneficiaries got in 2021.

September Inflation Highlights

The gasoline index rose 2.1% in September after jumping 10.6% in August.

The food index 0.2% for the month after inching up the same amount in August. The food at home index rose 0.1% in September after rising 0.2% in August, the BLS data shows.

The index for all items excluding food and energy 0.3% in September, compared with a 0.3% rise seen in August, the BLS reported.

Credit: David Palmer/ALM