A recent AARP survey finds that more than half of adults over 50 worry about not having enough money for retirement.
The Social Security Administration announced Thursday that the cost of living adjustment (COLA) for 2025 will be 2.5%, the lowest since 2021.
Social security retirement benefits, on average, the amount will increase by about $50 per month starting in January, the agency said.
“Social Security benefits and SSI payments will increase in 2025, helping tens of millions of people meet expenses even as inflation has begun to ease,” said Social Security Commissioner Martin O ‘Malley.
AMERICANS REVEAL THEIR BIGGEST FINANCIAL REGRET ABOUT POTENTIAL RETIREMENT
The 2.5% COLA is lower than the 3.2% adjustment which Social Security beneficiaries received in 2024, but would be roughly in line with the historical norm – since it averages 2.6% over the past 20 years.
“This adjustment means older Americans will get the help they need to better afford essentials, from groceries to gasoline,” said Jo Ann Jenkins, CEO of AARP, in a press release. “Inflation took a financial toll last year, particularly on retirees, who often rely on Social Security as their primary source of income. Even with this adjustment, we know that many older Americans who rely on Security social workers may have difficulty paying their bills.
THE “MAGIC NUMBER” FOR COMFORTABLE RETIREMENT REACHES A NEW CLASSIC HEIGHT
In 2023, beneficiaries saw an increase of 8.7%, the largest since the early 1980s, due to high inflation.
The Senior Citizens League, a nonpartisan group of seniors, highlighted the cost-of-living challenges facing older Americans and cited results from its 2024 Retirement Survey, which found that 65% of people seniors had monthly expenses of at least $2,000, an increase from 55% in 2023.
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That survey found that more seniors are spending at least $4,000 or $6,000 per month compared to 2023, while fewer people are managing to get by on $1,000 or less.
“This year represents another missed opportunity to give seniors financial aid they deserve by changing the COLA calculation from CPI-W to CPI-E, which would better reflect changes in senior spending,” Shannon Benton, executive director of the Senior Citizens League, said in a statement Thursday.
