The Cost of Living Adjustment (COLA) is an important index, revised annually, which adjusts social security benefits as per increased survival costs. However, experts fear that even though the COLA is projected to be 2.7% next year (a 0.2% hike from this year), senior citizens may still find it difficult to make ends meet.
“The monthly maximum Federal amounts for 2025 are $967 for an eligible individual, $1,450 for an eligible individual with an eligible spouse, and $484 for an essential person,” reads the official SSA website. “In general, monthly amounts for the next year are determined by increasing the unrounded annual amounts for the current year by the COLA effective for January of the next year. The new unrounded amounts are then each divided by 12, and the resulting amounts are rounded down to the next lower multiple of $1.”
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What the data says
Retirees received an average of $2,006.69 in benefits during July. A 2.7% COLA would raise that average monthly check by roughly $54, as reported by Investopedia. The TSCL approximates that nearly 22 million seniors live solely off their Social Security benefits, although the Consumer Expenditure Survey (CES) data shows $5000 as the amount spent on necessities by an average retired household.
In addition, a survey by Nationwide reveals that 55% of current recipients of benefits don’t cover basic retirement needs, as 63% believe that continually rising tariffs will drive inflation beyond what the COLA will cover.
Expert weighs in
When asked about the impact inflation might have on COLA rates, Shannon Benton, the executive director of TSCL, told Investopedia, “Anyone who is going to the grocery store knows the price of things has increased by more than 2.7%. The other main problem with this is that the Medicare Part B premium is also expected to go up, which may wipe out the entire benefit of COLA [for some people], making it so they never even see that adjustment.”
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“A 2.7% adjustment is better than nothing, but Congress could do more. Social Security recipients deserve more, which keeps up with actual inflation. Inflation persistence over the last several years has been particularly tough for seniors,” she adds. “Many Social Security beneficiaries rely solely on their benefits, and they know they can’t make ends meet.”
Benton believes that Congress must act on the issue at the earliest before Social Security funds run out.
Stuti Gupta contributed to this story
