Every year, the Social Security Administration increases benefits (Social Security Benefits) to keep up with inflation. This means recipients get a cost-of-living raise to help with rising prices. This prediction is based on recent inflation data. In June, consumer prices went up by 3%, the smallest increase since June 2023. Economists had predicted a 3.1% increase.
Smaller Increase Expected for 2025:
This year, the 67 million people who receive Social Security might get the smallest increase since 2021. The 2025 cost-of-living adjustment is expected to be around 2.63%, according to the Senior Citizens League, a group that supports older Americans.
Monthly Payments (Social Security Benefits):
If the 2.63% increase happens, it would mean an extra $50 a month for someone currently getting the average monthly benefit of $1,907.
Announcement in October:
The official announcement of this year’s cost-of-living adjustment (COLA) will come in October. The new COLA will first appear in most recipients’ January benefit checks.
Seniors Still Struggling?
Although U.S. inflation is slowing down, many seniors are still struggling. Poverty among senior citizens has been rising. Nearly half of people over 65 said they have trouble paying their household bills, according to a recent Census Household Pulse survey from May 28 to June 24.
How the COLA is Calculated?
The Social Security Administration calculates the annual COLA based on inflation from July through September. They use the average inflation rate during this period from the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which tracks spending by working Americans.
Insecurity in food
“Rising grocery prices are causing food insecurity for many retirees,” the Senior Citizens League said. Feeding America estimated that 5.5 million Americans aged 60 and older faced food insecurity in 2021, and that number is likely higher today.
Some groups and lawmakers have criticized the use of the CPI-W. They say older Americans spend their money differently than younger workers. For example, the CPI-W assumes workers spend about 7% of their income on health care, but older Americans can spend up to 16% or more on health costs.
Information source and special Thanks to: CBS NEWS