it’s ominous news for seniors still struggling with inflation social security officials expect benefits to rise by just 33 starting in january 2024 down from the record 87 rise this year that would be barely half the current rate of inflation that senior citizens are seeing in their monthly expenses officials made the forecast at a press conference unveiling the latest annual report from the program’s trustees which said the combined social security trusts to stop being able to pay full benefits in 2034 that’s year earlier than previously expected mostly because the negative changes to the economy the trustees consider potential cost of living adjustments as part of their overall actuarial analysis of the solvency of social security increased benefits result in higher costs longterm for the program but at the same time they foresee inflation easing by late summer it’s still early in the year to know how will actually pan out as we won’t know the actual numbers of the cola until the fall but it is alarming news nonetheless inflation usually hits seniors even harder than everyone else partly because of a clever trick in how social security calculates it social security currently pays out about 112 billion a month to 67 million americans and is the mainstay of most older americans’ incomes the latest official inflation figures showed consumers’ costs rose 04 from january to february which works out at an annual rate of 49 but seniors are paying more than that uncle sam says that the “cpie” the consumerprice index for the elderly rose by 06 last month—an annual rate of 75 so why would next year’s cost of living adjustment be only 33 it will be based on the regular cpi not the one for the elderly in july august and september of this year and how much it has changed from the same figures a year earlier so it’s effectively how much consumer prices have changed from one summer to the next the social security administration like many in washington seems to be expecting inflation to collapse in short order we shall see the key thing about social security’s colas is that they are paid a year in arrears prices rose 59 in 2021 so seniors got a 59 hike in their benefits in 2022 prices rose another 87 in 2022 so they got another 87 bump in monthly benefits this year this is great for the social security administration and by extension the federal government which borrows from it wages tend to rise in line with inflation in real time meaning the program’s revenues get an immediate boost from inflation while the benefits and therefore the program’s costs stay behind the eight ball when inflation surges as it has in recent years that’s especially bad news for seniors so over the past five years from january 2018 through december 2022 government data show that the average senior’s expenses as measured by the cpie rose 20 but their benefits during that time rose just 12 in real spendingpower terms by the end of 2022 they were getting 8 less per month than they were at the start of 2018 meanwhile the new annual trustees’ report shows the program’s financial woes deepened last year and the 75year hole in the accounts widened by 10 to 224 trillion the government will have to find money to fill that hole either by cutting benefits or raising taxes for context that works out to 12 of annual gross domestic product per year over the next 75 years total federal taxes currently average around 19 of gdp so a 12point hike to fill in the social security gap would be substantial among the many reasons for the hole is that the maximum income limit on which social security taxes are paid hasn’t kept up with average incomes that amount jumped 9 in 2023 to 160200 in 1983 when ronald reagan and house speaker tip o’neill struck their famous deal to shore up the program they expected social security taxes on apply to 90 of earned incomes but today it applies only to about 82 because incomes above the limit have skyrocketed by far more than those for everyone else when he was running for president joe biden said he wanted to start applying social security taxes on incomes over 400000 but with the house of representatives now in the hands of the opposition republicans he didn’t even include the idea in this latest budget