WASHINGTON (AP) – Shelley Myers, 82, of Pensacola, Florida, says the Social Security cost-of-living increase she will receive in January will “do nothing” to help her make ends meet. . daily expenses.
“Inflation has eaten away at my savings,” she said. “I have nothing to fall back on. My cushion is gone.” So despite the expected increase, she is still looking for work to supplement her retirement income, which consists of a small pension and Social Security benefits. There is.
About 70.6 million Social Security recipients With inflation slowing, the cost of living is expected to increase by less in 2025 than in recent years. The Social Security Administration officially announced the COLA on Thursday, and analysts had previously predicted the 2025 tax rate would be 2.5%. 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.
AARP estimates that with a 2.5% COLA, the average benefit for retirees receiving about $1,920 per month would increase by $48 per month starting in January 2025.
“Many seniors will say this isn't really enough to keep up with prices,” said Bill Sweeney, AARP's senior vice president for government affairs.
He said there are encouraging signs that inflation is easing.
The announcement comes as the country's social insurance program faces 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.
On her campaign website, Harris says she will protect Social Security by “making millionaires and billionaires pay their fair share of taxes.”
President 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 implementation Interview with 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.”
“We will protect it through growth,” President Trump said. I don't want to do anything about getting older. I won't do that. You know, I was there for four years and I never thought of doing it. Social Security is not going to do anything. ”
Lawmakers have proposed a variety of solutions to address the funding gap.
of Republican Study Committee's 2025 Plan proposes reducing Social Security costs by raising the retirement age and reducing annual COLAs. President Trump does not support this plan.
Linda Benesch, a spokeswoman for Social Security Works, an advocacy group, said, I'm concerned,” he said.
The Social Security Administration announced in July that Harris, as a California state senator, decided to co-sponsor a bill requiring the Social Security Administration to use a different metric (CPI-E) to calculate cost of living increases. I supported him as a presidential candidate. It measures price changes based on seniors' spending patterns, such as medical, food, and drug costs.
COLA is currently calculated based on the Bureau of Labor Statistics' Consumer Price Index (CPI).
