The majority of seniors are aware that they are entitled to an automatic cost-of-living adjustment (COLA) every year from their Social Security income.This is to assist people maintain purchasing power and stay up with inflation, but one thing that COLAs aren’t supposed to do is raise benefits.

Experts advise beneficiaries not to rely entirely on benefits to meet their retirement needs for this reason. Benefits were only supposed to cover about 40% of a wage, which was never supposed to be enough to pay expenses. Even still, a lot of retirees depend on their Social Security income to get by, and many are worried about how they will manage in the next year following this year’s 2.5% increase.

The impact of a low COLA on retirees Social Security benefits

The boost aids those who depend on Social Security in one way or another for costs like Medicare.The average monthly Social Security income in 2024 increases from $1,927 to $1,976 in 2025 when the 2.5% COLA is included. This is merely a $49 increase, which will leave beneficiaries with just $39 more per month to cover expenses when we factor in the previously announced Medicare Part B increase (the standard monthly premium for Part B is $174.70, but it will grow to $185 in 2025).

Those with larger checks will receive more, while those with lower benefits will receive less. This does not imply that all beneficiaries will receive the same increase. Since Social Security eligibility starts at age 62 and Medicare eligibility doesn’t begin until age 65, some recipients won’t even be affected by this situation because they aren’t even eligible for Medicare.

The 2.5% increase will barely cover the increase in expenses that most people experienced in 2024, when inflation exceeded the COLA in the first half of the year, let alone make up for some of the savings they used up to cover the difference in their expected expenses. This is true regardless of the increase and the services you are signed up for.

How to make up for a minimal increase

It is simple to suggest, “Well, just get a higher salary or a different job that pays better, or just move,” when you are a regular employee. However, for seniors, this can be a little more difficult. Even if it can be challenging to make some lifestyle changes, the improved financial situation might make the sacrifice worthwhile. The fundamentals of the issue remain the same.

The easiest approach to boost your disposable income is to move to a less costly area of the country because benefits are based on your record rather than your residence. It can be difficult to leave friends and relatives behind, but the sooner you establish yourself, the better, as you can create a network of support if necessary. This has the added benefit of giving you extra income from the sale of a house in a higher cost of living area or passive income from its rental.

In fact, you can sell and downsize or rent your house even if you are staying in your own city. It may be tempting to keep the house, but consider how much of your income is going to maintaining it and other options around you that may suit your lifestyle better. A smaller home is also simpler to heat, cool, and clean.

As a last resort, if you are fit enough, consider returning to a workforce with part time jobs that allow flexibility. It does not have to be a high pressure job, or even in your field, but it would give extra income as well as some contact with other people that may stave off isolation.

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