COLA Increase 2024 Medicare: According to the Senior Citizens League, the average cost-of-living adjustment (COLA) over the past 20 years has been around 2.6%.
According to Mary Johnson, an independent analyst specializing in Social Security and Medicare and a former Senior Citizens League analyst, the Social Security COLA could rise to 3.2% in 2025.
The official announcement of the 2025 COLA will be made in October, but recent data suggests it could be even higher.
Social Security’s COLA could be 3.2% in 2025 https://t.co/EriUQelThq via @marketwatch
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COLA is calculated based on the consumer-price index for urban workers, which focuses on expenses such as transportation, food, apparel, and other expenses incurred by urban non-retirees. Although the rate of inflation has slowed down, consumer goods and services have continued to grow in price in April, according to the latest CPI report. According to Johnson, this higher inflation indicates that consumer purchasing power is continuing to be eroded.
It is particularly difficult for older adults to afford housing or shelter, electricity, and home care as these costs rise. Johnson noted that housing accounts for about half of the budget for retired and disabled Americans, so a 5.5% increase in shelter costs is especially challenging. The costs of outpatient services, car insurance, and repairs have also increased, as well as food prices.
An analyst predicts a higher-than-expected Social Security COLA of 3.2%
It has been difficult for older adults to keep up with these cost increases, which have outpaced the 3.2% COLA increase for 2024. Although the COLA is not technically a raise, it serves as an important adjustment that reflects inflation and can provide much-needed relief to the 67 million beneficiaries of Social Security.
According to a recent report by the Social Security and Medicare Board of Trustees, Social Security may soon become insolvent.
In summary, the potential 3.2% COLA increase in 2025 reflects the ongoing challenges older adults face in maintaining their standard of living amidst rising costs. “The higher inflation indicates consumers are still experiencing an erosion in purchasing power,” Mary Johnson stressed, emphasizing that adequate adjustments are needed to support Social Security recipients.
