Social Security recipients are projected to receive a “substantially lower” Cost of Living Increase in 2025, with the latest forecast showing a decrease from 2.66% to about 2.57%. The determination of COLAs is based on the Consumer Price Index for Urban Wage Earners and Clerical Worker’s average price tracking of a basket of goods, with the final announcement set for October and implementation in January 2025.
The decreasing COLA predictions are concerning for seniors, with high inflation rates exacerbating real-life expenses. Data from The Senior Citizens League’s 2024 Senior Survey revealed that 69% of participants reported their household costs surpassing the COLA increase last year, particularly in areas such as food and housing. The trend of COLAs failing to keep up with inflation has become more prominent in recent decades, with only one out of five implemented in the 2020s outpacing inflation.
As a result of financial strains, half of retirees surveyed admitted to dipping into emergency savings, while a third resorted to visiting food pantries or applying for SNAP benefits. Additionally, a quarter of respondents reported depleting their retirement or savings accounts to zero, highlighting the significant impact of inadequate COLA adjustments on older adults’ financial stability.
