The 2024 Cost of Living Adjustment (COLA) - Motley Fool

It’s that time of the year again – the time when the Federal Government announces how much of a bump everyone will get to their Social Security payment – and with it comes the usual cries of how the Cost of Living Adjustment (COLA) for next year is not enough. Truth told, it’s not enough because COLA is determined after-the-fact, meaning after we’ve already been paying those inflated prices. Especially on the heels of last year’s 8.7% COLA increase, which followed a 5.9% bump the previous year, this year’s 3.2% COLA, which becomes effective in 2024, seems paltry by comparison. But is it really?

Viewed in relation to the last two decades of COLA increases, the forthcoming 3.2% increase is reasonably high. The average COLA increase since the year 2000 is 2.6% which, of course, includes 3 years where no increase was given at all due to lack of inflation. And there was one year in which a minuscule 0.03% COLA was awarded …. about as close to zero as you can get. Point is, although few would argue that the the forthcoming 2024 COLA of 3.2% will catch us up for the money we’ve already laid out for everything we bought this year, this Motley Fool article by Maurie Backman puts it all into perspective – as COLA increases historically go, this one is above average.

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