Placeholder canvas
Wednesday, April 17, 2024
HomeFinance NewsUS government shutdown may hinder Social Security increase news

US government shutdown may hinder Social Security increase news

A potential federal government shutdown in the United States may lead to a delay in the annual pay increase for over 70 million retirees and government benefits recipients. The U.S. Labor Department has warned that if a shutdown extends into October, the scheduled release of the Consumer Price Index (CPI) for September, which determines the annual cost of living adjustment (COLA), could be affected. The COLA announcement, expected in October, impacts monthly benefits paid by the Social Security Administration (SSA). While a delay in the announcement would not affect when the new payment amounts take effect, it could disrupt retirees’ financial planning.

The COLA is determined by the CPI for Urban Wage Earners and Clerical Workers, which is published by the Bureau of Labor Statistics. In 2023, due to high inflation rates, the COLA announced was 8.7%, the largest increase since 1981. However, inflation has slowed down this year, and it remains uncertain if the upcoming COLA will offer a similar buffer over inflation as in 2023. Despite potential delays in the announcement, the new rate will still begin to be paid to Social Security retirement benefits recipients in January 2024, while payments to Supplemental Security Income (SSI) beneficiaries usually change in late December.

With inflation rates remaining higher than the pre-pandemic period, experts predict another larger-than-average COLA increase this year. However, it is expected to be lower than the previous year due to the slowdown in inflation. Last year’s COLA provided an increase in real incomes for recipients compared to inflation, which hasn’t been seen in a generation. The Social Security Administration has not yet commented on the potential impact of a delayed announcement on retirees’ financial planning.

Source link

RELATED ARTICLES

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Most Popular

Recent Comments