NOT SO GOLDEN: Social Security set to change before end of year – while 2025 increase predicted to drop to 2.5%
According to THE SUN, The next cost-of-living adjustment (COLA) for Social Security recipients, already expected to be the smallest in recent years, is now projected at just 2.5%. This figure is based on the consumer price index (CPI) data through August and marks a decline from earlier estimates of 2.63% in July and 2.57% in August, as reported by The Senior Citizen’s League (TSCL), a nonpartisan advocacy group for seniors.
Impact on Beneficiaries
This modest increase would mean an additional $48 per month for an average retired worker receiving a monthly benefit of $1,920. Despite the increment, TSCL executive director Shannon Benton notes that it will likely provide only a minimal boost to those reliant on Social Security as their primary income source. The increase may be insufficient to cover the rising costs of living, including inflation and the increasing prices of essential goods and services.
Historical Context and Trends
The Social Security Administration calculates COLA adjustments based on the Bureau of Labor Statistics’ CPI-W, which tracks changes in prices for a range of goods and services. Following record-high inflation rates that led to an 8.7% COLA in 2023, the adjustment fell to 3.2% in 2024. The projected 2.5% increase continues this downward trend, reflecting a cooling inflation rate. Historically, the COLA has averaged around 2.6% over the past 20 years.
Also Read: SNAP update: List of States delivering Food Stamp checks of up to $1,751 from Sep. 9-28
Concerns from Advocacy Groups
TSCL highlights concerns that the current COLA may not adequately reflect the true cost of living for seniors. The CPI-W may not fully capture the rising costs of necessities such as medication, housing, and groceries. According to TSCL’s 2024 Senior Survey, 69% of respondents felt that their household costs rose faster than their COLA in the previous year, with significant increases in food and housing expenses.
Rising Costs and Financial Pressure
The TSCL’s 2024 Retirement Survey reveals that 65% of seniors now have monthly expenses of at least $2,000, up from 55% in 2023. Many seniors are also reporting higher expenses, with some seeing monthly costs of $4,000 or $6,000. This increase in essential spending comes amid concerns that the projected 2.5% COLA may not be sufficient to meet financial needs.
Looking Ahead to October
The official COLA for 2025 will be announced by the Social Security Administration in mid-October, following the release of September’s CPI data. The final adjustment will be based on average inflation rates from July, August, and September. As seniors await the official announcement, many are grappling with the challenge of rising costs and the potential inadequacy of the projected COLA.
Also Read: Popular bankrupt restaurant chain reopens first store
Additional Considerations
In related news, some Social Security beneficiaries in nine states may face higher taxes in September, potentially reducing their checks. Additionally, upcoming changes to Social Security could result in increased benefits for certain individuals. For more information on Social Security updates, readers can follow The U.S. Sun’s comprehensive coverage on the topic.
