Goodbye to 2025 COLA – Retirees take hit after announcement of check increase for next year

Following the announcement of the 2.5% hike in October, many people began to work out their new situation. They took this action to determine whether it would improve their financial situation, but the outcome has not been favorable.

The rise was calculated using data from the third trimester of the year. The number was low, which should be a good thing, and measures had been done to slow down inflation by that point.

Therefore, a smaller COLA and lower inflation indicate that the economy is stabilizing and that prices will stop rising. Retirees will, however, have less money to cover their already increased expenses.

Those who would like to know how much the cola will increase the benefits may find the following table useful:

AGE	Current Average Retirement Benefit	Retirement Benefit After COLA	Change in Monthly Social Security Benefit
62	$1,298.26	$1,330.72	$32.46
67	$1,563.06	$1,602.14	$39.08
70	$2,037.54	$2,088.48	$50.94

Even while the reduced rise is a good thing, many people disagree with the index that was used to determine it.

Some claim that the Consumer Price Index for Workers (CPI-W), which tracks workers’ daily expenditures on items like housing, food, and consumer goods, is a poorer indicator of inflation than the Consumer Price Index for Americans aged 62 and Over (CPI-E), which gauges the costs faced by older adults.

Executive Director Shannon Benton supports the change. She stated in a statement that this year is another missed chance to give seniors the financial assistance they are entitled to by switching the COLA calculation from the CPI-W to the CPI-E, which would more accurately account for their evolving spending.

In order for Americans to retire with dignity, seniors and TSCL encourage Congress to take immediate action to enhance COLAs. For instance, they want the CPI-W to be used to determine COLAs rather than the CPI-E, and they demand a minimum COLA of 3%.

further stated that he concurred that the minor COLA had a disastrous impact, but he provided no solutions. Social Security recipients need the yearly COLA to cover their expenses, but seniors on fixed incomes find that 2.5% is far from sufficient.

The Social security COLA insufficiency a compounded issue

A smaller COLA is simply one aspect of the issue; the majority will probably be taken up by increased Medicare deductibles and premiums. The majority of Social Security recipients deduct their Medicare costs straight from their paychecks. Their checks get lower as these expenses increase.

The 2025 Medicare premium, deductible, and coinsurance rates were revealed in November. Changes to Medicare Part A, Part B, and the income-based monthly premiums for Medicare Part D are all included in these rates. It’s a significant increase.

If you have Medicare Part B, your annual deductible will increase by $17, from $240 in 2024 to $257 in 2025, and your monthly premium will increase by $10.30 to $185.00. That’s just a portion of it.

Many prices have increased recently, including those for housing, groceries, gasoline, and other items. Many seniors are now in a difficult situation as a result of having to use their savings to make up the difference between their bills and benefits.

The modifications are made after the fact, and although though a lower COLA is helpful since it means prices won’t increase as quickly, they can make seniors feel as like they are drowning in expenses with no way out in sight.

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