Time flies. It doesn't seem like all that long ago when we were ushering in a new year. Now, 2023 is more than halfway over, with fall just around the corner.
Retirees don't only have cooler temperatures to look forward to. Their biggest Social Security news of the year is also less than 10 weeks away.
Image source: Getty Images.
Circle the date
The Social Security Administration (SSA) hasn't officially announced when it will reveal the cost-of-living adjustment (COLA) for 2024. However, you can go ahead and circle a date on your calendar.
SSA provided its update for the 2022 COLA on Oct. 13, 2021. Last year, the agency also revealed the annual adjustment on Oct. 13. It will almost certainly announce next year's COLA on Oct. 12, 2023 -- a little under 10 weeks from today.
How can we know that's the big date? SSA uses the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for the third quarter to determine the adjustment. The Bureau of Labor Statistics (BLS) supplies the monthly CPI-W figures. Guess when it's scheduled to provide the updated numbers for September? Pat yourself on the back if you answered Oct. 12.
The BLS always announces the monthly CPI data at 8:30 a.m. ET. SSA doesn't need much time to crunch the numbers to calculate the COLA. Look for the agency to reveal your adjustment for 2024 relatively soon after the BLS figures come out.
What to expect
While we can predict almost precisely when SSA will announce the COLA, accurately projecting the adjustment amount isn't easy. The problem is that all three months of BLS' CPI-W data from the third quarter are used in the COLA calculation. As of right now, we only have one monthly CPI-W figure from Q3.
If we used only that one figure, the 2024 COLA would be around 2.3%. That's lower than the 3% increase projected a few weeks ago by The Senior Citizens League, a nonpartisan organization that advocates for seniors.
Take both of those percentages with a grain of salt, though. It's possible that inflation could continue to moderate with the impact of the Federal Reserve's interest rate hikes that began last year continuing to ripple through the economy. There's also a chance that won't be the case.
What we can confidently predict, however, is that your COLA for 2024 will be well below the 8.7% Social Security benefits increase that retirees received this year. It's highly unlikely that inflation will skyrocket enough over the next couple of months to push the COLA anywhere near the 2023 level.
More big news coming even sooner
While Oct. 12 is arguably the most important date for retirees, more big news is on the way even sooner. The Centers for Medicare and Medicaid Services (CMS) typically announces Medicare Part B premiums for the next year in September. As of now, the CMS hasn't provided a specific date for this announcement.
Seniors actually received a modest reduction in Part B premiums in 2023 after the CMS decided against covering Biogen's Alzheimer's disease drug Aduhelm. Unfortunately, the big news about Medicare Part B premiums will almost certainly be less positive than last year's.
Biogen and its partner, Japanese drugmaker Eisai, have a new Alzheimer's disease drug, Leqembi, on the market. The CMS is covering Leqembi. With a price tag of around $26,500 per year, the drug will likely drive Medicare costs -- and Part B premiums -- higher.
