Starting in January 2025, millions of older Americans will see a 2.5% increase in their Social Security benefits, marking the smallest cost-of-living adjustment (COLA) since 2021. This adjustment is expected to add approximately $50 to the average monthly benefit, which will rise from about $1,927 to $1,976. The announcement was made by the Social Security Administration (SSA) on October 10, 2024, and will affect roughly 68 million beneficiaries. Additionally, about 7.5 million recipients of Supplemental Security Income (SSI) will see their increased payments starting December 31, 2024.
The COLA is calculated based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which measures inflation based on a specific basket of goods. While inflation has cooled compared to previous years, many advocates argue that the current method of calculating COLA does not accurately reflect the spending habits of seniors, particularly regarding healthcare costs.
Advocates are calling for a shift to the Consumer Price Index for Elderly Consumers (CPI-E), which would better reflect the spending patterns of seniors. As beneficiaries prepare for the January increase, concerns remain about whether this modest adjustment will adequately cover rising living costs.
For further details and updates on this story, refer to the original article on AP News.
Sources:
[1] https://www.cbsnews.com/news/social-security-cola-increase-2025-cost-of-living-adjustment/
[2] https://www.cnbc.com/2024/10/10/heres-why-the-social-security-cola-is-smaller-for-2025.html
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