Millions of older people are having a hard time making ends meet because they can’t afford housing, food, or medical care. The upcoming raise in Social Security checks will not help these people. The Social Security Administration thought that the next COLA raise might not be enough for retirees who are already having a hard time because prices keep going up.
Mary Johnson, an independent researcher who focuses on Social Security and Medicare, says that the COLA will be announced on October 10. Analysts expect a small 2.5% increase because inflation is going down.
It’s less than the 3.2% growth seen this year and the 8.7% growth seen in 2023. The nonpartisan Senior Citizens League says that the average COLA raise over the last 20 years has been about 2.6%.
Retired Americans are upset about the upcoming light increase in Social Security checks
It’s likely that the COLA rise will be the smallest since 2021. It would mean that people would get almost $48 more each month from Social Security in 2025. The average monthly income that retirees get now, according to the Social Security Administration, is $1,907, which is what that is based on.
The Medicare Part B payment is expected to go up by $10.30 a month, from $174.70 a month now, to $185 a month. This will lower some of the COLA. Since Medicare Part B is taken straight out of Social Security benefits, any increases to Medicare will cancel out some of the COLA gains.
For example, Susan, a 71-year-old woman from central Virginia, told MarketWatch that her family’s wants aren’t met by her $48 a month Social Security payment. Her monthly budget is mostly made up of money from Social Security. She spends $300 a week on groceries and gets extra food from her husband’s shooting.
Susan thinks that the regular payment doesn’t make a big difference in their income. The 71-year-old woman also said that even though gas prices have gone down, her energy bill has gone up and the costs of taking her two dogs to the vet have gone up a lot.
It was time for her to get a new roof, appliances, and HVAC system for her house. There is no way that a COLA raise could cover these costs.
About half of seniors in the US are unable to cover their basic needs of housing, food, transportation, and healthcare
New study from the National Council on Ageing and the LeadingAge LTSS Centre at UMass Boston says that the predicted COLA increase will happen when more than half of seniors aged 60 and up can’t meet their basic needs for housing, food, transportation, and medical care.
The Elder Index measures basic needs, and the study finds that over 27 million families, or 49.6% of older people, cannot meet these needs. In 2020, the most current data that could be used showed that the full effects of the pandemic had not yet been felt and that the number of households had grown by almost 5% in just two years.
Additionally, the Elder Index shows how much money people of different ages need to pay their basic bills, stay in their homes as they get older, or keep their freedom. Housing, transportation, Medicare payments, and food are some of the things that are covered.
It includes the cheapest meal plan that meets USDA nutritional standards. It doesn’t allow for fun, relaxation, or eating meals away from home. The report says that between 2018 and 2020, 60% of older people’s overall assets went down, even though their income went up a little.
It turned out that 15 million homes, or 20% of Americans over 60, had nothing of value and some were even in debt. The middle income for this group in 2020 was $18,000. It was below the Elder Index level for more than 90% of this group’s households.
A study by Marc Cohen, co-author of the LeadingAge LTSS Centre at UMass Boston, shows that millions of older people are still living on the edge, even though their incomes have gone up. As things get worse, they can’t keep going like this. It’s a problem. The study shows that quick action is needed because the country is in the worst part of a crisis right now.
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