Social Security benefits are adjusted annually through a Cost of Living Adjustment (COLA) to protect retirees from inflation. However, in 2025, the 2.5% COLA is insufficient for many seniors, primarily due to increased Medicare premiums that offset the increase. Research indicates that retirees' payments are now worth significantly less than in previous years, with many falling short of keeping pace with rising costs in key consumer categories, leading to an average loss of $4,442.80 annually compared to 2020 levels.
Social Security retirees in 2025 saw a 2.5% COLA, but many did not receive the full amount due to rising Medicare premiums that were deducted from benefits.
Research shows that COLAs are failing to help seniors maintain their standard of living, with costs increasing at rates above inflation.
The average payment in 2024 is worth approximately 80 cents on the dollar compared to 2020, leaving retirees short roughly $4,442.80 per year.
Evidence suggests that retirees are losing ground because essential spending categories have seen price increases that outpace the adjustments made through COLA.
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