Inflation is cooling, and Social Security could give a more modest increase in 2025. The increase in prices in the US economy is cooling and inflation could report calmer numbers compared to those of months ago. This is good news for consumers because they will pay less for products and services, but it could hurt seniors and other Social Security beneficiaries who are waiting for the cost of living adjustment (COLA), a tool of the Social Security Administration so that beneficiaries do not lose purchasing power.
The latest estimate from The Senior Citizens League (TSCL) states that a considerably lower COLA is expected for next year, if compared to the 3.2% that was awarded to Social Security beneficiaries in 2023. Alex Moore, Social Security and Medicare statistician at The Senior Citizens League and managing partner at Blacksmith Professional Services, predicts that the COLA for 2025 will be about 2.63%, slightly higher than the 2.57% predicted last month.
The inflation rate in the United States, called the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), measured by the consumer price index used to calculate the COLA, fell to 3.0% in June. Although this decline should bring relief to older consumers, the accelerating rise in food prices during the 2020s means that financial relief is still a long way off.
Between the years 2020 and 2023, the average cost of food products in the United States, as measured by the CPI-W, increased by 24%. Some products increased more, such as eggs, which increased by 86%, while other products had different inflationary performances. For example, white sugar increased by 45%, canned soft drinks by the dozen by 44%, ground coffee by 39%, chocolate chip cookies by 38%, ham by 35% and white bread by 35%.
Retirees at Risk: Social Security to Deliver a Lower COLA Increase Than They Expected
The increase in the prices of food, goods and services generates food insecurity for many retirees. According to Feeding America, 5.5 million Americans aged about 60 or older were food insecure in 2021. That number is likely to be higher today, but there is no more recent data as of yet.
You can look at TSCL’s 2024 senior citizen survey, in which more than 1,550 people from all over the United States participated, which indicates that 34% of retirees claimed to have visited food banks or ordered meal vouchers such as SNAP Benefits or Supplemental Security Income (SSI) in the last 12 months.
Programs to supplement your Social Security Benefits
If you depend on Social Security to make ends meet and pay all your basic expenses, and it’s not being enough because of inflation, there are some programs that can help you and that are within your reach right now.
To get started, you can apply for the Supplemental Security Income (SSI) program, which offers additional financial assistance to people over the age of 65, blind or disabled with limited income and resources. This additional income can help cover basic needs such as food, housing and clothing.
The Supplemental Nutrition Assistance Program (SNAP) is also available for low-income seniors. SNAP provides food purchase benefits to low-income individuals and families. Beneficiaries receive a card that they can use at authorized grocery stores, which helps to reduce food spending and balance the monthly budget.
Healthcare and Utility Bills
Beyond food, there are other needs that have an impact on your economy, such as health. Medicaid provides free or low-cost health coverage for low-income people, including retirees. This coverage can include medical care, hospital and nursing services, helping to significantly reduce medical costs.
Also check out the Low Income Household Energy Assistance Program (LIHEAP) to pay your utility bills. LIHEAP helps low-income people pay their heating and cooling bills. This assistance can be crucial to maintaining a comfortable home without negatively affecting the monthly budget.