Seniors can expect the lowest cost of living increase since 2021

Social security recipients can expect the annual cost of living adjustment next year (COLA) to its lowest level since 2021, after inflation figures were cooler in July and August.

On Wednesday, the Bureau of Labor Statistics reported that the consumer price index rose 2.5 percent compared to a year ago.

Combined with July's 2.6 percent increase and a similar increase expected for September, benefit recipients can expect an increase of about 2.5 percent in their payments, according to advocacy group The Senior Citizens League.

That equates to an increase of about $46.80 per month.

While the lower COLA forecast reflects an economy in which price growth is slowing, Social Security supporters say retirees and others on fixed incomes will be particularly hard hit by inflation.

According to experts, they are less able to seek alternative sources of income and are exposed to different prices for goods and services compared to the rest of the population.

“Essential goods such as housing, meat, auto insurance, and services and repairs of all kinds continue to be overpriced,” said Mary Johnson, an independent Social Security analyst, in a press release.

The situation is likely to remain particularly dire due to rising costs for Medicare Part B, the part of Medicare that pays for things like ambulance services, certain medical equipment and clinical research.

Earlier this year, the Medicare Board of Trustees estimated that the Part B premium, which is automatically deducted from monthly Social Security checks, would rise by $10.30, or 5.9 percent, to $185 a month in 2025.

Johnson said that amount would be about one-fifth of the expected total increase that a 2.5% COLA would bring.

The Social Security Administration is expected to announce the official cost-of-living adjustment for 2025 on October 10.

A survey conducted by the Senior Citizens League found that 65% of seniors reported monthly expenses of at least $2,000, up from 55% in 2023.

“Due to higher living costs, older Americans must spend an increasing share of their income each month to survive compared to last year,” the league said on Wednesday.

Much of the political debate over Social Security continues to focus on reforming—and ultimately cutting—the entire program. But earlier this year, Democratic Senator Bob Casey of Pennsylvania introduced the Boosting Benefits and COLAs for Seniors Act, which would increase Social Security benefits by a margin “that truly reflects the costs incurred by seniors.”

The bill would tie COLAs to an alternative inflation index compiled by the Bureau of Labor Statistics that is designed to more accurately reflect prices paid by Americans age 62 or older.

“For millions of older people in Pennsylvania and across the country, Social Security is the promise of a safe and stable retirement,” Casey, who is narrowly missing re-election, said in a statement introducing the bill.

“As the cost of basic goods and services for seniors rises, we cannot allow this promise to be broken,” he said. “The Boosting Benefits and COLAs for Seniors Act would help seniors cope with rising costs and ensure that Social Security remains a lifeline for all who need it.”