The ongoing government shutdown has led to a significant delay in the announcement of the annual Social Security cost-of-living adjustment (COLA) for millions of beneficiaries. Originally set for Wednesday, the announcement has been pushed back to October 24, due to the unavailability of the September Consumer Price Index, which the Social Security Administration (SSA) relies on to determine the adjustment.
As the shutdown continues into its third week, the impact on financial planning for beneficiaries becomes increasingly acute. Projections from organizations like the Senior Citizens League and AARP suggest that the COLA increase for 2024 will be approximately 2.7%. This adjustment will affect around 70.6 million people, including retirees, individuals with disabilities, and children receiving Social Security benefits. However, many SSA beneficiaries are expressing concerns that even with this increase, it may not sufficiently offset the rising cost of living.
Sue Conard, a 75-year-old retired nurse from La Crosse, Wisconsin, recently joined fellow retirees from the American Federation of State, County, and Municipal Employees union to lobby for both healthcare protections and changes to Social Security benefits. Conard highlighted the inadequacies in the current method of calculating COLA, arguing that the standard Consumer Price Index does not adequately reflect the spending patterns of older Americans, particularly with regard to healthcare costs.
“The issue of how the COLA is determined is flat-out wrong because health care is not factored into the CPI,” Conard stated during a rally at the U.S. Capitol. In response, several lawmakers have proposed legislation that would require the SSA to utilize the Consumer Price Index for the Elderly (CPI-E) for calculating COLA. This alternative index accounts for the specific expenditure patterns of older Americans, particularly in areas like healthcare and essential goods.
Efforts to advance such legislation have met obstacles; a proposal by Senator Bob Casey, D-Pa., to change the COLA calculation did not receive a hearing in the Senate Finance Committee last session. AARP’s CEO, Myechia Minter-Jordan, emphasized the critical nature of the COLA for older Americans, describing it as a “lifeline of independence and dignity,” even as many still struggle to cover basic expenses.
Vanessa Fields, a 70-year-old former social worker from Philadelphia, shared her own challenges, noting that her monthly grocery bills have reached approximately $1,000, reflecting an increase from past years. She lamented that the current COLA adjustments are insufficient to keep pace with rising living costs, warning that many could find themselves in dire financial situations if lawmakers do not take action.
Despite the ongoing shutdown, Social Security officials indicate that notifications regarding the new benefit amounts will begin in early December, with adjustments to retirement and Supplemental Security Income benefits set to take effect on January 1, 2026. An anonymous SSA spokesperson reassured that these adjustments would proceed without delay despite the government shutdown.
The stakes surrounding the delayed COLA announcement are heightened by a pressing financial outlook for the Social Security program. According to a June report from the Social Security and Medicare trustees, the program’s trust fund is projected to be unable to fully pay benefits starting in 2034—an earlier date than previously estimated. If the trust fund is exhausted, only 81% of scheduled benefits would be disbursed.
Additionally, the SSA has experienced substantial cuts to its workforce, having laid off approximately 7,000 employees from its staff of 60,000 earlier this year. This reduction has intensified the workload for remaining staff members, who face rising claims and inquiries from beneficiaries as they navigate an increasingly complex system amid the ongoing shutdown.
