Inflation Worsens for Older Adults As Social Security COLA Forecast Drops

The COLA for Social Security benefits was 3.2% in 2024. According to an ongoing study, Survey by the Senior Citizens LeagueAt the time of publication, 71% of older Americans believed this year’s rate increases would not be enough to cover rising bills.

“With the COLA for 2025 projected to be 2.66 percent, seniors will likely continue to suffer from the same financial insecurity next year as they have this year.” Shannon Benton says:Executive Director of the Senior Citizens League.

by Social Security AdministrationThe average monthly benefit in 2024 is $1,907, up about $50 from 2023. Benton said the net benefit increase was just $40.20 because Medicare costs increased by $9.80 per month.

Meanwhile, 43% of respondents to the Senior Citizens League survey said their monthly expenses in 2023 will increase by at least $185 per month compared to the previous year.

Social Security recipients typically receive an increase in benefits in January to make up for rising costs of living, with the exact amount based on the rate of inflation observed in the Bureau of Labor Statistics’ Consumer Price Index (CPI) from July through September of the previous year.

The rising cost of living It changes a lot every yearIn 2020, with the final adjustment based on pre-pandemic inflation, the COLA was 1.3%. In 2022, the increase was 8.7%.

More than 67 million Americans receive Social Security, but they are not guaranteed an increase. Since the COLA was added to Social Security benefits in 1975, there have been three consecutive years without an increase in monthly benefits.

Like many Americans, food prices appear to be one of the areas of inflation hitting seniors hardest.

In a Senior Citizens League survey, 61% of respondents said food was their biggest increased expense.

According to the USDA, the recommended food budget has increased by 27% since 2020, which is one of the biggest reasons Americans are still not satisfied with their finances.