In 2024, California retirees can expect the Social Security Cost of Living Adjustment (COLA) to be around 3.1%...
If you're hoping for an increase in social security payments, I have some good news. Mary Johnson, the Senior Citizens League's social security and Medicare policy analyst, predicts the Social Security Cost of Living Adjustment (COLA) will be around 3.1% in 2024.
Over the past few decades, the Cost of Living Adjustment has been vital for helping senior citizens fight inflation. The Senior Citizen's League data show that from January 2000 and February 2023, Social Security COLAs raised benefits by 78%, or 3.4% annually. It's also important to note that the average retiree's cost of living climbed by 141.4%, or roughly 6.2 percent annually, over the same timeframe.
Many Retirees In California Can't Afford Basic Necessities Anymore
"Lower-income consumers tend to spend a higher proportion of their income on necessities than those with higher incomes," per Investopedia. "This means they have less of a cushion against the loss of purchasing power inherent in inflation."
The poverty rate among Americans over the age of 65 is sadly rising. According to CNBC, "6 million older adults in the country are struggling to make ends meet."
“This increase shines a glaring spotlight on the fact that Social Security and Medicare, the bedrock of retirement security for so many, are not sufficient to lift all older adults above poverty,” said Ramsey Alwin, CEO of the National Council on Aging.
Many retirees throughout California are finding it difficult to afford rent and mortgage payments. In part, that's because many people's incomes haven't increased alongside the rising cost of living. Quoting an article published by The Guardian:
"Wages don’t keep up with rising costs, so the threshold for losing financial assistance, linked to income levels, rises at a slower pace than the cost of living. Because of the instability of the economy, fluctuations in gas prices and cost-of-living increases, many are unable to make accurate budget predictions that would enable them to confidently taper off their use of welfare programs."
As you can see from the graph below, renter income hasn't kept up with skyrocketing rent prices in California over the past few decades:
The median cost of rent of a 1-bedroom apartment in San Diego is approximately $2,700, according to data published by Zillow. That's a year-over-year increase of $275 (compared to data from May 2022). And unfortunately, the situation isn't much better elsewhere. The median rent of a 1-bedroom apartment in Los Angeles is currently $1,923. However, the year-over-year increase is an eye-watering $206.
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