Small Social Security adjustment expected as inflation slows

At 75, Shirley Hedlund has a part-time job doing light office work.

“The little extra money helps but I also like socialization,” said Hedlund.

The extra money helps supplement her pension and Social Security benefit that comes with a yearly cost-of-living raise. 

“You consider it in your budget,” said Hedlund. “Typically, we haven’t always counted on the cost-of-living raise because it’s never been that big anyway, so it’s not a huge adjustment, but it helps many people.”

Experts predict as inflation slows, next year’s cost-of-living adjustment could increase only 2.6%, down from 3.2% this year.

“It’s tough making ends meet with the price of food and medications,” said Hedlund. “So it has a big impact on many, many, many seniors.” 

“I have many clients that depend on Social Security as their primary source of income,” said Lou Deppas, financial advisor, The Legend Group. “They’re not going to be able to make a go of it if that number occurs.”

Deppas says as the cost-of-living adjustment decreases, Medicare Part B, which comes out of Social Security, continues to increase.

“For the first time in several years their monthly income will decline,” said Deppas. “It’s a difficult problem. And in a lot of cases, a lot of people have not prepared for what’s coming.”

While the adjustment is expected to spur spending and boost the state economy, leaders say there are many benefits, services and programs for those who solely rely on Social Security. 

“Call your local Office for the Aging and see what benefits you may be eligible for that can really assist in helping with financial security,” said Greg Olsen, director, NYS Office for the Aging.

Hedlund, whose hours will increase this fall during open enrollment for Medicare Advantage Plans, works for Deppas, and urges seniors to be financially aware. 

“I think it’s wise to be careful and to be smart about how you spend your money,” said Hedlund.

Experts also say next year’s cost-of-living increase would be the lowest since 2021, compared to the 8.7% recipients saw in 2023.