Social Security benefits get an annual cost-of-living adjustment (COLA) to help retired workers and other recipients keep up with inflation. That aspect of the program has been critical in recent years. The scorching inflation that followed the COVID-19 pandemic led to a 5.9% COLA in 2022 and an 8.7% COLA in 2023, the two biggest raises beneficiaries have received in four decades.

However, inflation has cooled substantially in the past year due to aggressive action taken by the Federal Reserve, so Social Security recipients are on pace to get a much smaller raise next year. Indeed, economists and policy experts at Boston College, Morningstar, the Bipartisan Policy Center, and The Senior Citizens League expect Social Security's 2024 COLA to be 3%.

That estimate may be a tad optimistic. Here's why.

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Source Fool.com