Many people on Social Security rely on their benefits to provide the bulk of their income. One key advantage that Social Security offers its participants is that the monthly benefits it pays out are adjusted annually for inflation. Cost-of-living adjustments, or COLAs for short, help older Americans avoid a big loss in purchasing power.

COLAs were especially important for Social Security recipients in 2023 as soaring inflation led to an 8.7% boost to payments starting in January. Yet, even though it's far too early to make firm conclusions about what seniors should expect in 2024, it's entirely possible that COLAs for next year could fall sharply or even disappear entirely.

Inflationary pressures have largely abated in the past several months. After soaring 9.8% in the 12 months from June 2021 to June 2022, the Consumer Price Index (CPI-W) has fallen in four of the past six months. As of December 2022, it was below its level from six months previously.

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Source Fool.com