(VOR News) – On Thursday, the Social Security Administration announced that a 2.5% cost-of-living adjustment will be implemented in January for millions of Social Security recipients.
The cost-of-living adjustment, or COLA, provides retirees with an average monthly increase of over $50, according to agency officials.
Social Security benefits are received by approximately 72.5 million individuals, including retirees, incapacitated individuals, and children. Nevertheless, retirees expressed concern that the increase would not be sufficient to counteract the increasing costs even before the announcement.
Sherri Myers, an 82-year-old retiree from Pensacola City, Florida, is currently seeking an hourly position at Walmart in order to supplement her income. “I am unable to consume nutritious food, despite my desire to do so.” While at the grocery store, I simply disregard vegetables due to their exorbitant cost.
The woman commented, “Even McDonald’s is expensive, so I have to be extremely selective about my food choices.” In 2024, recipients experienced a 3.2% increase in benefits, following an unusually high 8.7% increase in 2023 as a result of the highest inflation rate in 40 years.
Moderating inflation is indicated by the reduced increase in 2025.
Social Security Commissioner Martin O’Malley anticipates that the impending increase will provide recipients with some relief, as the agency is currently managing a record number of retirees, while funding is at an all-time low and inflation has decreased.
We tell those who believe the Social Security adjustment is insufficient, “You are not wrong.”
He pointed out that “in their older years, they have to spend their money on a different array of costs and expenses, including prescription drugs.” “I’ve heard the stories and it is a struggle for seniors,” said the representative.
He asserted that the actions taken by the Biden-Harris administration should result in a reduction in prescription drug expenses for a significant number of individuals.
The organization will commence informing beneficiaries of their revised benefit amount via letter in early December. Approximately 7.5 million recipients of Supplemental Security Income will commence receiving adjusted benefits on December 31.
It is anticipated that payroll taxes, which are withheld from employees and their employers to support the program, will increase to $176,100. The utmost earnings that were subject to payroll taxes from Social Security in 2024 were $168,600, a rise from $160,200 in 2023.
The announcement is being made in anticipation of the significant financial deficit that the national social insurance plan is expected to encounter.
The annual Social Security and Medicare trustees report, which was released in May, indicates that the program’s trust fund will be unable to sustain full payments beginning in 2035. The research indicates that the government will be able to cover only 83% of the scheduled payments if the trust fund is depleted.
Jo Ann Jenkins, CEO of AARP, stated in a statement, “There is more we must do to ensure that older Americans can continue to rely on Social Security.” AARP continues to advocate for Congress to collaborate across party lines in order to strengthen Social Security and establish a sustainable long-term solution for the nation.
Social Security proposals from Kamala Harris and Donald Trump differ.
Harris and Trump were interviewed by AARP in late August to ascertain their strategies for protecting the Social Security Trust Fund.
Harris pledged to compensate for the deficit by ensuring that billionaires and large corporations pay their equitable share of taxes and allocate the proceeds to the long-term protection and enhancement of Social Security.
Trump declared, “We will safeguard it through expansion.” I have no inclination to participate in any activities that are associated with the process of aging. That is not the course of action I will take. I was there for four years, as you are aware, and I never gave it a second thought. I will refrain from implementing any modifications to Social Security.
O’Malley asserts that there is a movement to implement an alternative index by the Social Security Administration that evaluates price fluctuations by analyzing the spending patterns of older individuals on commodities such as food, medicine, and health care. Subsequently, this index would be implemented to ascertain the increase in the cost of living.
The COLA is currently calculated using the Consumer Price Index, which is a market basket of consumer products and services. O’Malley asserts that lawmakers who advocate for the modification are “promoting an exceptionally sound policy.”
SOURCE: AP
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