Social Security Checks Increase by $48 – Retirees Disappointed with COLA Adjustment

Millions of older adults in the U.S. continue to face financial difficulties, struggling to afford basic necessities like housing, food, and healthcare. While the Social Security Administration (SSA) is set to announce a cost-of-living adjustment (COLA) increase in October, many fear it won’t be enough to counteract rising living costs.

With the COLA expected to be a modest 2.5%—down from last year’s 3.2%—retired Americans are concerned about how they’ll continue to make ends meet. Let’s break down what this means for retirees and why the COLA increase may fall short of addressing their financial needs.

COLA Overview

The COLA is designed to adjust Social Security payments based on inflation, helping retirees and those on fixed incomes keep up with rising prices. However, this year’s anticipated 2.5% increase, down from 8.7% in 2023, has left many seniors worried. According to analysts, this will likely translate to about a $48 per month raise for the average Social Security recipient, who currently receives around $1,907 monthly.

While any increase is welcomed, retirees feel it’s insufficient given the rising costs of everyday expenses, especially food, housing, and healthcare. In fact, the nonpartisan Senior Citizens League reports that over the past 20 years, COLA increases have averaged 2.6%, which is barely enough to keep pace with the persistent inflation that many older adults experience.

Medicare Premium Increases

Adding to retirees’ frustration is the anticipated rise in Medicare Part B premiums, which are deducted directly from Social Security benefits. The premium is expected to increase by $10.30, bringing the total to $185 per month. This hike will essentially erode some of the COLA increase, leaving retirees with less disposable income to cover other essentials.

For instance, if a retiree’s Social Security payment increases by $48 a month, the Medicare premium increase could reduce that gain to around $38. This leaves seniors with very little additional support, especially those who rely heavily on Social Security as their primary or sole source of income.

Personal Struggles

To illustrate the challenges faced by many older Americans, consider the example of Susan, a 71-year-old woman from Virginia. She told MarketWatch that the anticipated $48 increase is barely enough to cover her grocery expenses, let alone her rising utility bills and veterinary costs. Despite her husband’s efforts to supplement their food budget by hunting, Susan struggles to cover basic household repairs, including a new roof and a replacement HVAC system.

Like Susan, many seniors across the country face similar difficulties. Even though some costs, such as gas prices, may fluctuate, other necessary expenses continue to rise, making it hard for retirees to balance their budgets.

Growing Crisis for Older Adults

According to a recent study by the National Council on Aging and the LeadingAge LTSS Center at UMass Boston, nearly half of adults aged 60 and older in the U.S. are unable to meet basic needs like housing, food, transportation, and healthcare. Using the Elder Index to assess living costs, the research found that 49.6% of older adults—around 27 million households—are struggling financially.

The Elder Index reveals that more than 60% of seniors have seen a decline in their assets in recent years, with many facing significant financial insecurity. Shockingly, about 15 million households (the bottom 20% of seniors) have no assets at all and are even in debt. The median income for this group is just $18,000 annually, far below what’s needed to cover basic living expenses.

Unsustainable Situation

Despite some income growth, millions of older adults live in precarious financial situations. The research highlights that more than 90% of the lowest-income households fall below the Elder Index threshold, meaning they are unable to afford their basic needs. As Marc Cohen, co-author of the LeadingAge LTSS report, states, “Millions of older adults continue to live on the edge. The situation is unsustainable and worsening.”

The current COLA increase, while somewhat helpful, will not resolve the deeper financial crisis facing many older Americans. With rising costs of living and insufficient Social Security adjustments, seniors are at risk of falling further into poverty, leading to an even more dire financial crisis for the elderly population.

The upcoming COLA increase is a reminder that, while inflation adjustments are necessary, they are often not enough to keep pace with the rising costs of living faced by millions of older adults. Retirees are struggling to afford housing, food, and healthcare, and the modest COLA increase will provide only a small relief. As more seniors edge closer to financial instability, there is a growing need for more comprehensive solutions to address the economic challenges facing older Americans.

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