What is the Social Security COLA 2024 Estimate?

Social Security COLA is likely to be around 2.5-3.0% in 2024.

We won’t know for sure until mid-October, but we know 12 out of the 15 monthly CPI-W numbers that go into the equation so anything much lower or higher would be a big surprise.

How is the Social Security COLA determined?

Social Security COLA is determined by a measure of inflation called CPI-W which is less widely reported than CPI-U.

For 2024, Social Security will look at the average CPI-W from the 3rd quarter of 2023 and compare it to the 3rd quarter of 2022 numbers.

With the latest CPI release we now have 12 of the 15 monthly numbers that go into the 2024 Social Security COLA calculation.

2022 Q3 CPI-W Average291.902
June CPI-W 3mo Average298.502
June 2023 CPI-W299.394
2024 COLA Trendline Projection3.0%
2024 COLA June Value Projection2.6%
2024 COLA Projection.
Trendline Projection = (298.502/291.902)^(9/12)-1
June’s Value Projection = (299.394/291.902)-1

The projection from the 3 month average for 2024 Social Security COLA is 3.0%.

Historically, the 3rd quarter inflation is much lower than the preceding quarters that go into the number. If inflation over the next 3 months is flat, then the projection is 2.6%.

Why is 2024 COLA projected to be so much lower than the past 2 years?

While 2024 COLA is likely to be down compared to the last two years, remember that COLA is directly tied to inflation. The only reason COLA was so high in 2022 & 2023 is because inflation was so high in 2021 & 2022. Prior to 2022 the 30-year COLA average was 2.4%, so hopefully this is a sign that inflation is returning to ‘normal.’

What can I do to combat the lower Social Security COLA in 2024?

One bright spot for those on a fixed income is that interest rates are much higher. If you’re not getting over 4% on your savings or CDs then you need to find better banks to work with!

Here’s how to get more interest on your bank money.

If inflation is slowing, and you’re preparing for the year ahead you may consider moving some money into 1-2 year CDs so that you can be sure of the interest you’re getting on your money in 2024. And right now those CDs are paying much higher than the projected COLA!

Another option could be Treasury Bills. Right now they are paying higher interest than most similar bank accounts. Here’s how to get more interest from Treasury Bills through your Treasury Direct account.

You could also consider increasing your Social Security, by deferring your Social Security.

If you are between your Full Retirement Age and 70 you could write Social Security to ask them to defer your payments. You could wait all the way to 70, but if you defer for just 1 year you would get an 8% higher payout! That beats any bank account you could find.


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