Since the new cost of living adjustment (COLA) was announced, the official 2.5% annual rise has made half of retired Americans think about going back to work.
A new poll says that half of all seniors are thinking about getting back to work because their Social Security checks are not enough. Over 2,000 retired Americans were polled by The Motley Fool on October 11.
Half of them said they were thinking about leaving retirement to make more money.
Social Security Administration (SSA) said on October 10 that the cost-of-living adjustment rise for 2025 would be the lowest in several years, at 2.5%. This is when the poll came out.
Despite the increase in Social Security checks, retirees are not satisfied with it
Social Security checks are sent to retired people, people with disabilities, and the families of people who have died and are no longer alive. Every year, tens of millions of people get benefits. The COLA changes the numbers every year.
It is found by taking the average of the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) between the third quarter of this year and the same time last year.
Any raise is turned into the yearly COLA and rounded up to the tenth of a percent. Furthermore, the poll shows that 54% of retirees think the most recent COLA is not enough.
Due to rising prices, each year’s increase has become bigger in recent years. In 2023, benefits were raised by 8.7 percent, and in 2024, they were raised by 3.2 percent.
There are thoughts of going back to work from at least half of those who said the 2025 COLA is either totally or partly inadequate. The average monthly Social Security check in 2024 will be $1,907, according to Jack Caporal, research lead at The Motley Fool.
This is after the 3.2 percent COLA. That is a lot less than the $5,070 a month that Americans 65 and older will spend in 2023.
Given that only 54% of American families had a retirement account in 2022, it is not surprising that a lot of seniors polled think they need another source of income.
Millions of seniors rely on Social Security checks to cover their daily expenses
A lot of senior citizens in the United States count on their Social Security checks for everything, even though the program is not meant to meet all of their needs.
The Motley Fool says that 28% of people only depend on their Social Security checks to make ends meet, while 32% of people depend on them a lot, which is more than half, or 60%.
Caporal says that people may want to go back to work for a number of reasons, such as a sense of purpose, a daily routine, to help a charity or other cause, and more.
However, the poll results show that retirees who are thinking about changing jobs do so because they want to keep their current standard of living and financial security.
A number of other studies have also shown that the yearly COLA does not help older Americans.
The neutral Senior Citizens League (TSCL), which speaks for the elderly, found earlier this year that the average Social Security check in 2024 will only be worth about 80 cents on the dollar compared to 2010.
The group also wants to change the way COLA is calculated so that it is based on the CPI-E, which tracks how much Americans aged 62 and up spend.
Shannon Benton, executive director of TSCL, told Newsweek that this year is another lost chance to give seniors the financial help they deserve by changing the COLA calculation from the CPI-W to the CPI-E, which would better show how seniors’ spending has changed over time.
Seniors and TSCL say that Congress needs to move quickly to raise COLAs by doing things like setting a minimum COLA of 3% and switching the COLA calculation from the CPI-W to the CPI-E. This will help Americans retire with honor.
A study by the Senior Citizens League found that 62 percent of seniors are worried that their retired income will not be enough to cover even the most basic costs, like food and medical bills.
67 percent of seniors depend on Social Security for more than half of their income.
