Social Security COLA Increase for 2025 Disappoints Elderly People

The Social Security cost-of-living adjustment (COLA) for 2025 is expected to be higher than initially predicted in January. However, numerous beneficiaries are expressing concerns about whether this increase will adequately cover the rising inflation and the mounting expenses they face in their daily lives.

Every year, the amount of Social Security payments is adjusted to reflect the annual Cost of Living Adjustment (COLA). The COLA takes into account the inflation rate measured by the Consumer Price Index (CPI). In 2023, seniors and individuals with disabilities receiving Social Security payments experienced a significant increase of up to 8.7 percent. However, the following year, in 2024, the COLA was much lower, at only 3.2 percent. As a result, most beneficiaries received an approximate $50 raise in their checks.

Heading into 2025, seniors and Americans with disabilities had initially anticipated a COLA of 1.75 percent, as estimated in January. However, the Senior Citizens League now predicts that the 2025 COLA will be 2.4 percent. Despite this adjustment, beneficiaries remain apprehensive about the impact on their monthly payments.

“You walk into a grocery store and immediately sense the frustration among seniors,” expressed Alex Beene, a financial literacy instructor for the state of Tennessee. He further added, “During retirement, they were not expecting to see such steep price increases on everyday purchases that have been significantly affected by inflation.”

The prediction for inflation has increased following a rise in the Consumer Price Index (CPI), which measures the inflation rate of goods and services. In February, the CPI increased by 3.2 percent compared to the previous year. The core rate, on the other hand, saw a significant surge of 3.8 percent. The CPI for urban wage earners and clerical workers, which determines the percentage used for COLA, also grew to 3.1 percent.

Read More:  Education Secretary Cardona Faces Second Call to Resign After Receiving Failing Grades

Seniors are becoming increasingly frustrated with the worsening inflation rates, especially when it comes to their regular expenses such as housing and healthcare. The Bureau of Labor Statistics reveals that shelter costs have increased by 5.7 percent year over year, while medical services have seen a slight uptick of 1.1 percent.

According to a survey conducted by the Senior Citizens’ League in January, senior citizens have reported experiencing price increases on almost all of their household items. The survey found that a staggering 93 percent of seniors stated that their monthly household expenses have increased by over $59 in 2023. Additionally, 43 percent of respondents claimed that their monthly expenses have risen by more than $185.

Some seniors are feeling anxious that the increase in Social Security payments might not be sufficient to meet the rising inflation. Moreover, they also have concerns about facing additional taxes as their income tax brackets elevate due to the higher benefit checks.

According to data from the National Council on Aging, approximately 25 million Americans aged 60 and above live at or below 250 percent of the federal poverty line. These seniors often depend heavily on Social Security to cover their day-to-day expenses.

According to a report by Atticus, a legal help platform, it was discovered in November that a significant 70 percent of single seniors are facing financial difficulties. Furthermore, as inflation continues to rise, 40 percent of seniors are contemplating the idea of returning to the workforce for additional income.

According to Beene, while there have been increases, many people feel that they are not significant enough. It is understandable why this sentiment exists. Beene suggests that the solution lies in a combination of government and business efforts. To truly satisfy seniors, there needs to be a more substantial increase in benefits, along with a decrease in persistently high prices.

Read More:  East Point teacher alleges she lost her job after reporting that the principal was assaulting a first-grade student

Reference article

Leave a Comment