Seniors Are Getting Shortchanged — Social Security COLA Can’t Keep Up with Inflation!
Inflation is taking its toll on everyone, but perhaps no group harder than America’s seniors. According to an article by Yahoo! Finance, the annual Social Security cost-of-living-adjustment (COLA) just isn’t keeping up with inflation. A recent study found that retirees’ Social Security checks have lost significant buying power. So much so that retirees would need about a $370 monthly boost in their Social Security checks to make up for all they’ve lost in recent years.
Inflation Impact
It found that: “Between 2010 and 2024, Social Security COLAs increased benefits 3.9 percent per year on average. However, the cost of goods and services purchased by typical retirees jumped by an average of about 4.9 percent annually over the same period.”
COLA Forecast
Things probably aren’t going to get much better next year either. Right now, the 2025 COLA is predicted to be 2.65 percent. That’s less than this year’s 3.2 percent. We’ll find out for sure in October when the Social Security Administration makes its official announcement. If the forecast is true, retirees will receive about $50 more per month on average. That’s clearly not going to make much of a dent in seniors’ wallets.
Better COLA Calculator
One clear thing is that we need a better COLA calculator. Currently, the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) is used. That does a disservice to older Americans. Senior advocates such as The Seniors Trust believe the Consumer Price Index for Americans 62 years of age and older (CPI-E) would be a better formula, as it more accurately reflects the costs incurred by older adults, especially related to healthcare and housing.
The Social Security Expansion Act calls for adopting the CPI-E. Not only would this provide Social Security recipients with a fairer COLA, but this landmark piece of legislation also provides across-the-board benefits boost of about $2,400 per year and long-term Social Security solvency.
