Aging support groups said Thursday that the 2025 cost-of-living adjustment (COLA) for Social Security checks probably will not keep up with the rising costs that retirees will have to pay.
The COLA was set at 2.5%, which means that retired workers’ Social Security checks will go up by about $48 a month, from an average of $1,920 to $1,968.
It was a much smaller increase than in previous years. Supporters called it a “missed opportunity” and called for “serious reform,” pointing to rising costs of everything from food to health care as proof that many seniors could have trouble paying their bills.
First reactions are coming after increasing Social Security checks in 2025
The consumer price index for urban wage earners and clerical workers (CPI-W) measures the average change in prices paid for a group of goods and services bought by urban workers.
It is used to figure out the cost of living adjustment (COLA).
Senior advocates told Newsweek that the Consumer Price Index for Elderly Consumers (CPI-E), which is based on changes in prices for goods and services that older people buy, would be a more true way to figure it out.
In a statement, Shannon Benton, executive director of the Senior Citizens League, said that this year is another missed chance to give seniors the financial help they need by changing the COLA calculation from the CPI-W to the CPI-E, which would better reflect how seniors’ costs are changing.
Seniors and the Senior Citizens League (TSCL) say that Congress needs to move quickly to raise COLAs.
To do this, they suggest setting a minimum COLA of 3% and changing the calculation method for COLAs from the CPI-W to the CPI-E. This will allow Americans to retire with dignity.
Inflation slowed down in the third quarter, which caused Social Security checks to go up less. This was the smallest annual rise since 2021.
A spokesperson for the Social Security Administration told Newsweek that the law requires Social Security to base our yearly COLA on the Consumer Price Index from the Labor Department. However, Congress has the power to change this.
The Senior Citizens League said that from the start of the year, it had expected inflation to go down and the COLA to be low. Before the news came out, it correctly projected a 2.5% COLA.
The study found that 67 percent of seniors depend on Social Security checks for more than half of their income and that 62 percent worry that their retirement income will not even cover basic costs like food and medical bills. Benton said.
Also, a recent poll of seniors found that 72% wanted to change the COLA formula to a measure that better showed how much their costs were going up.
Seventy percent of seniors were also worried that high inflation would make them spend more, which could drain their retirement savings.
A number of politicians have also spoken out against the planned COLA, saying that it will not help seniors much in their old age. There has also been a push to raise Social Security checks so that older people can keep their money and spend it.
There are more than 13 ways that the suggested Social Security 2100 bill would improve Social Security checks. Some of these changes would only last for five years.
Drew Powers, founder of the Powers Financial Group in Illinois, said that the new COLA increase was in line with CPI data and predictions, even though it was criticized.
Powers also told Newsweek that this rise is a little less than the average for the last 20 years, but still a little more than the average for the last three years.
Consumer Price Index (CPI)-U and CPI-W have never been good at measuring how much seniors spend, and that has always been the problem. When the COLA number does not match up with reality, it hurts the seniors in our community.
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