Social Security's 2025 COLA: Insufficient Relief for Rising Senior Costs

moneyPhoto byAlexander MilsonUnsplash

The 2.5 percent cost of living adjustment (COLA) for Social Security payments in 2025 has sparked disappointment among seniors, who feel it does not adequately address the rising costs they are experiencing, particularly in essential areas like groceries and healthcare. Despite the $50 increase in monthly payments, many seniors are struggling to make ends meet, especially those who rely solely on Social Security for retirement income.

The current COLA figure, while lower than recent years' increases, is still higher than some historical periods when inflation was minimal. However, experts like Alex Beene and Kevin Thompson acknowledge that the current COLA calculation may not fully account for the significant rise in expenses like shelter and healthcare for retirees. They advocate for a more tailored approach to calculating COLA that better reflects the real costs seniors face in their daily lives.

Thompson suggests that adjusting the COLA to align with these critical expenses could provide more meaningful support to retirees in coping with financial challenges. It's clear that the 2.5 percent COLA increase for Social Security payments in 2025 has highlighted the ongoing financial struggles faced by many seniors. The discrepancy between the rising costs seniors encounter, especially in essentials like groceries and healthcare, and the relatively modest increase in their payments underscores the need for a more nuanced approach to calculating COLA. By considering specific expenses that significantly impact seniors' daily lives, such as shelter and healthcare, a tailored COLA calculation could provide more accurate and meaningful support to those relying on Social Security as their primary source of income in retirement.

Alex Beene and Kevin Thompson's call for a recalibration of the COLA formula to better reflect the realities of retirees' expenses resonates strongly in an era of rising living costs. As retirees navigate financial challenges, a COLA adjustment that takes into account the specific financial burdens they face could help alleviate some of the strain on their budgets and improve their overall quality of life. By prioritizing a more targeted approach to COLA calculations, policymakers have an opportunity to enhance the economic security and well-being of older Americans who depend on Social Security for their retirement income.

Source:

https://www.newsweek.com/how-social-security-2025-cola-increase-compares-previous-years-1967201