WASHINGTON (AP) — More than 70 million Social Security recipients will learn Thursday how much their benefits will increase their cost of living next year.
Prior to the announcement, analysts had expected the growth rate in 2025 to be about 2.5%, smaller than the growth rate over the past two years. The recipient is Benefits increased by 3.2% in 2024 after a historically large-scale disaster. 8.7% benefit increase 2023, brought by records Highest inflation in 40 years.
COLA declines next year reflect easing inflation.
Approximately 70.6 million people participate in the Social Security program and receive an average monthly benefit of approximately $1,920. AARP estimates that a 2.5% COLA would add $48 per month.
Prior to the announcement, retirees had expressed concerns that the increase would not be enough to combat rising costs.
Shelley Myers, an 82-year-old retiree from Pensacola City, Florida, is now hoping to get an hourly job at Walmart to make ends meet.
“I want to eat something delicious, but I can't. When I go to the supermarket, the vegetables are too expensive, so I end up passing them by. I have to choose carefully what I eat. Even McDonald's is expensive,” she says. spoke.
With increasing participation and fewer contributing workers, Social Security programs will face severe funding shortfalls in the coming years.
Annual Social Security and Medicare Administrative Board Report released in May The program's trust fund will no longer be able to pay out the full amount of benefits after 2035, according to the report. If the trust fund is depleted, the government will only be able to pay out 83% of scheduled benefits.
The program is funded by payroll taxes collected from workers and their employers. The maximum amount of income subject to Social Security payroll taxes increased from $160,200 in 2023 to $168,600 in 2024. Analysts expect the peak to reach $174,900 in 2025.
During the presidential campaign, Vice President Kamala Harris and former President Donald Trump offered a head-to-head plan for how to strengthen Social Security.
Democratic candidate Harris says on her campaign website that she will protect Social Security by “making millionaires and billionaires pay their fair share of taxes.”
Republican candidate Trump has promised not to cut social programs or change the retirement age. President Trump also promised tax cuts for older Americans, posting on Truth Social in July, “Seniors shouldn't pay taxes on Social Security!”
AARP conducted an interview Harris and Trump in late Augustand asked how candidates would protect the Social Security Trust Fund.
Harris said she would make up for the shortfall by “making billionaires and big corporations pay their fair share of taxes and using that money to protect and strengthen Social Security over the long term.”
President Trump said, “We protect it by growth. We don't want to do anything about getting older. We don't do that. You know, I was there for four years and I never thought of doing that. I didn't. I'm not going to do anything with Social Security.”
