8 months ago
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(NewsNation) — The Social Security Administration has announced a 2.5% cost-of-living accommodation for recipients successful 2025, the smallest specified increase since 2021.
On average, Social Security status benefits volition summation by astir $50 per period starting successful January, a insignificant summation for most.
And recipients are feeling the pinch, with a caller survey from the Motley Fool showing a bulk (54%) presumption this year's COLA accommodation arsenic insufficient. A akin number, 50% — person considered going backmost to enactment to marque ends meet.
An adjacent wider majority, 81%, agreed that the 2025 COLA volition assistance "very little" oregon not "at all" with cardinal expenses similar food, lodging and vigor costs.
Social Security cost-of-living adjustments person varied implicit the past fewer years. Here’s however they person changed:
- 2025: 2.5%
- 2024: 3.2%
- 2023: 8.7%
- 2022: 5.9%
- 2021: 1.3%
The caller driblet is owed to a cooling gait of inflation, which is bully for the wide system but whitethorn permission retirees struggling to screen costs.
Often, retirees trust heavy (32%) oregon exclusively (28%) connected payments contempt Social Security being designed to screen 40% of the mean worker's salary.
Most respondents, 71%, don't deliberation the look to find the COLA accurately reflects however retirees acquisition inflation.
How is Social Security COLA determined?
Each year, the authorities determines the COLA by comparing the average ostentation rate from July to September to the aforesaid play the twelvemonth before. That calculation is based connected the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).
Some senior advocacy groups want the authorities to find the COLA based connected the CPI-E, a antithetic ostentation scale specifically for seniors, arguing it would much accurately bespeak the spending patterns of those 62 and older.
The immense bulk of Social Security beneficiaries, astir 75%, are retired workers who received an average monthly check of $1,920 as of August. That’s about $80 more than the twelvemonth prior.
Social information shortfall
Thursday’s COLA announcement comes arsenic the nationalist societal security program faces a looming fiscal shortfall. In astir a decade, Social Security recipients could spot their benefits chopped by 21% if Congress doesn’t instrumentality action.
Vice President Kamala Harris and former President Donald Trump have vowed to support the program and promised not to slash benefits, though neither has offered galore specifics.
The 2025 COLA summation volition beryllium reflected successful your January Social Security check.
NewsNation's Andrew Dorn contributed to this report.
