Angry seniors have expressed frustration over next year’s Social Security increase, with many wondering how they will afford their living expenses.
The Social Security Administration announced last week that nearly 68 million Social Security beneficiaries will see a 2.5 percent increase in their benefits in 2025.
This increase, known as a cost-of-living adjustment, or COLA, is the lowest since 2021: an average increase of $49 a month.
Since then, older Americans and senior groups have expressed disappointment in the increase, which they say does not reflect their changing spending after years of high inflation.
‘My Social Security disability check is currently only about $60 more than my rent. In January, when I sign my new lease, I will be in the negative,” one user wrote in a Reddit thread about the increase. “I’m hanging on by a thread.”
This increase, known as a cost-of-living adjustment, or COLA, is the lowest since 2021.
Increased payments to nearly 7.5 million people who receive Supplemental Security Income (SSI) funds will also begin on December 31, 2024.
The COLA increase is based on a specific inflation measure called the Consumer Price Index for all urban wage earners and white-collar workers (CPI-W).
This tracks price changes that urban wage earners and white-collar workers pay for a basket of common consumer goods and services.
The increase will increase the average benefit for retired workers by $49 in 2025, raising it to about $1,976 per month.
It is the lowest annual increase since 2021, when beneficiaries received a 1.3 percent increase in benefits.
In 2024, there was a 3.2 percent increase, and in 2023 there was an 8.7 percent increase, the highest in four decades in response to record inflation.
In 2022, profits increased by 5.9 percent.
Now that the pace of inflation is slowing toward the Federal Reserve’s 2 percent goal, the COLA adjustment has moved closer to the historical norm.
Benefit growth has averaged about 2.6 percent over the past 20 years, according to the nonpartisan group The Senior Citizens League (TSCL).
But the group said the measure by which the annual increase is calculated does not measure inflation as experienced by seniors.
TSCL CEO Shannon Benton said this year represents “another missed opportunity to give seniors the financial relief they deserve” by changing the COLA calculation that would “better reflect seniors’ changing expenses.”
He suggested instituting a minimum COLA of 3 percent.
“Our research shows that 67 percent of seniors rely on Social Security for more than half of their income and that 62 percent fear their retirement income won’t even cover essential needs like food and medical bills,” Benton added.
And many older people on social media express exactly these concerns about how to get ahead.
“I’m grateful for any increase, but it’s not enough, rent goes up more every year, forget about the increase in transportation and food and literally everything else, it won’t really make much of a difference,” wrote one user on Reddit. .
Another said: ‘There will be many old people who will be left without things. Many live SS check by SS check as they are. “With inflation so high it’s going to be difficult.”
“The COLA needs to be replaced with a cost increase that reflects real spending by seniors,” another person said.
Although inflation has fallen from its 2022 highs, sustained high prices have eroded household budgets, which is especially difficult for those on fixed incomes in retirement.
Food prices have increased 20 percent in the past five years, according to data from the Department of Labor.
The Social Security Administration announced last week that nearly 68 million Social Security beneficiaries will see a 2.5 percent increase in their benefits in 2025.
Many seniors also noted that this change could affect other benefits as well.
For those enrolled in Medicare, for example, Part B premiums are automatically paid with Social Security checks.
It’s not yet known how much Part B premiums will increase in 2025, but if they increase by $10 a month, then Social Security’s $49 increase will be reduced to $39.
Jo Ann Jenkins, CEO of AARP, said: ‘Even with this adjustment, we know that many older Americans who rely on Social Security may struggle to pay their bills. Social Security is the primary source of income for 40 percent of older Americans.
‘While this adjustment is important, we must do more to ensure that older Americans can continue to count on Social Security. AARP continues to call on Congress to take bipartisan action to strengthen Social Security and ensure a long-term solution Americans can rely on.’