An estimated 90 percent of retirees rely on Social Security benefits for a significant part of their retirement income. That’s why recipients always look forward to October when the Social Security Administration (SSA) announces its cost-of-living adjustment (COLA) for the coming year. The COLA is based on the rate of inflation reflected in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).
Although financial analysts are predicting the CPI-W will come in at about 2.6 percent for 2025, it will represent a step down from the 5.9 percent for 2022, 8.7 percent for 2023, and 3.2 percent for 2024. If it holds at that rate before the October announcement, the average beneficiary will receive an increase of about $50 per month.
The Motley Fool cautions that retirees may face a nasty surprise. The biggest expense for seniors can be their “shelter” expenses, such as housing and utilities. Right now, shelter inflation is running at 5.7 percent. It’s not factored into the CPI-W. So, the projected COLA won’t offset housing expenses or rising medical costs, which also don’t factor into the COLA.
You Deserve All the Benefits You Were Promised
Seniors need extra retirement income to better cope with inflation. That’s just one reason why Council of Seniors is convinced Congress must pass The SAVE Benefits Act. This bill is crucial because the annual Social Security cost-of-living adjustment (COLA) hasn’t kept up with inflation in recent years. If it passes, the amount of $581 will be returned to eligible seniors.
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