COLA Increase 2024 Medicare
2025 COLA: According to the government, inflation cooled more than anticipated in June, which caused the most recent projection of Social Security’s cost-of-living adjustment (COLA) for 2025 to drop to 2.7%, according to updated calculations released on Thursday.
The government said on Thursday that the consumer price index (CPI), a broad indicator of the expenses of goods and services, increased by 3% in June compared to the same month last year. As a whole, economists at FactSet think it will be 3.1%, which is less than what it was in May when it was 3.3%. The core inflation rate fell from 3.4% in May to 3.3% in June, the lowest level since April 2021. This was after changing prices for energy and food were taken into account. This also fell short of the 3.4% forecast.
The “consumer price index for urban wage earners and clerical workers” (CPI-W) is used to determine the Cost of Living Adjustment (COLA) for Social Security. The CPI-W percentage dropped from 3.2% in May to 2.9%, which is finally lower than the 3.2% COLA that Social Security beneficiaries started receiving in January.
Mary Johnson, a retired analyst for the charity Senior Citizens League, which tracks and computes COLA estimates, noted that the decline in the projected 2025 COLA adjustment is likely bad news for seniors who are still grappling with the cumulative effect of recent high inflation and high costs for daily necessities.
According to the investment firm Schroders’ 2024 US Retirement Survey, issued in May, 89% of elderly Americans are still concerned about inflation.
Deb Boyden, head of U.S. Defined Contribution at Schroders, stated, “Whether it’s a trip to the gas station, grocery store, or pharmacy, prices in the U.S. have increased noticeably in recent years, and that is particularly challenging for retirees living on fixed income sources.”
The things that seniors spend the most money on—food, housing, power, hospitals, and outpatient medical services—continue to rise faster than inflation as a whole, according to Johnson.
According to USA Today, June saw a 2.2% increase in food prices overall, but many of the most commonly consumed proteins saw substantially larger increases, according to her. According to government data, there was a 10% increase in beef roasts, a 7.4% increase in pork chops, and a 10.2% increase in eggs in June compared to the same month last year.
In the meantime, “our nation’s record-breaking heat means record-breaking electrical bills for many Social Security recipients,” she stated. According to figures, annual electricity rates increased by 4.4% in June.
The growth of health issues requiring home care, hospital inpatient or outpatient treatments, and total inflation has been around three times quicker. According to the government, June saw a 7.1% year-over-year increase in hospital services and an 11.4% increase in at-home senior care.
Johnson pointed out that the expenditures on shelter, which have increased by 5.4%, account for over half of the household budgets of retired and disabled Social Security users.
“Clearly, many older and disabled Social Security recipients are experiencing distress due to persistently high prices for essentials,” Johnson stated.
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Every year, from July to September, the Social Security Administration bases its COLA on average yearly increases in the consumer price index for urban wage earners and clerical workers (CPI-W).
The monthly broad index that the Labor Department releases generally matches the urban wage earners’ index, with a few minor exceptions. The consumer price index for urban wage workers gained 2.9% last month, compared to a 3% increase for the overall index.
To help beneficiaries keep up with inflation, Social Security payments to older adults were increased by 3.2% at the start of the year. As a result, the average monthly benefit for retirees increased by $59..
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