UNDATED (WKRC) – The Social Security Administration adjusts benefits for recipients annually based on inflation and other economic factors, but this year could see the smallest increase since 2021.
According to the Senior Citizens League, an advocacy group for elderly Americans, the low cost-of-living adjustment (COLA) comes from a dropping inflation rate. The Consumer Price Index has reported the rate of inflation as 3% in June, whereas experts estimated 3.1%. In accordance, 2025’s COLA will be 2.63%, the lowest since 2021. A 2.63% increase is around $50, bringing the total benefit to $1,907.
Technically, that’s just an estimate. The Social Security Administration does not officially announce the COLA until October. Additionally, COLA is determined by the average inflation rate from July through September, so June won’t even be accounted for in the final decision. Still, it’s a good early indicator.
Despite the inflation rate decreasing, poverty among older Americans is increasing.
“Rising grocery prices is creating food insecurity for many retirees,” said the Senior Citizens League. “Feeding America estimated that 5.5 million Americans age 60 and above suffered from food insecurity in 2021, in the most recent study available on the subject, and that number is likely higher today.”
The Senior Citizens League also noted that another issue with COLA is that the Social Security Administration doesn’t account for the spending habits elderly Americans. For example, whereas a typical person may spend 7% of their income on healthcare, older Americans spend upwards of 16% or more.
Keep an eye on the Consumer Price Index and any announcements from the Social Security Administration this year!