2025 Social Security increase won’t be enough for seniors, advocacy group predicts
While an increase in monthly benefits sounds like a good thing for Social Security recipients, a non-partisan advocacy group says the expected increase next year likely won’t help seniors. Although there are a handful of months left until the 2025 cost-of-living adjustment (COLA) is finalized, The Senior Citizens League’s says the latest estimate for the increase won’t keep up with rising household costs.
The group estimates Social Security benefits will increase by 2.66% in 2025. However, Shannon Benton, executive director of The Senior Citizens League, says that increase isn’t enough.
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“For 2024, the average Social Security benefit rose by $50.00, and after subtracting $9.80 to cover Medicare Part B Premium increases, the total change in benefits came out to just $40.20 a month. With the forecast of a 2.66% COLA for 2025, it appears seniors will continue to suffer financial insecurity as much next year as they have this year,” Benton said.
The COLA is determined by the Consumer Price Index for Urban Wage Earners (CPI-W) from the previous year. The CPI-W is calculated by factoring in the spending of Americans on items like food, consumer goods, housing, health care and more.
TSCL admits that the estimates may change in the coming months as the actual COLA is calculated using the average inflation rate during the third quarter – July, August and September – and then compared to the same time period from the year prior. The 2025 COLA will be announced in October 2024.
Regardless, TSCL says the slight 2.66% increase would not be enough to help seniors in particular when it comes to making ends meet.
“In The Senior Citizens League’s 2024 Senior Survey, a concerning trend emerges as 71% of respondents highlight an increase in household costs exceeding the 3.2% COLA they received for 2023,” Benton said.
The results of that survey were released last month and indicated that 43% of those who responded reported their household expenses increased by over $185 per month last year. As part of those household expenses, 61% said food is their most increased expense.
If TSCL’s 2025 estimate is correct, it would mark another drop year-over-year in the COLA from the historic 8.7% increase in 2023. In 2024, the COLA dipped to 3.2%.