A new analysis of the increase in Social Security payments shows that they may rise only 2.7%. The final number will be announced in October. While the monthly Consumer Price Index (CPI) numbers have run between 2.5% and 3.0% in recent months, the increase in the price of some essentials has been much higher. Seniors on tight budgets, especially those who rely on Social Security entirely, could struggle financially in the year ahead.
The forecasts for the Social Security COLA come from The Senior Citizens League. The analysis indicates there are two months to go before the Social Security Administration issues its final number. The organization listed the cost of transportation and the lack of public transportation among the challenges seniors face. The organization added that COLA “does not adequately capture the inflation they experience.”
A look at the latest CPI, which covers July, shows the areas that are challenging to the cost of living. Overall inflation rose 2.7%. However, the cost of shelter was up 3.6%. The cost of transportation rose 3.5%, and the cost of medical care services was up 4.3%.
According to the Social Security Administration, 72 million people receive Social Security—approximately 16.4 million Americans live on Social Security alone.
The relatively low COLA adds to concerns that Social Security will run out of money, leaving it unable to pay full benefits in late 2032. At that point, all Social Security financial benefits could decrease by 24%.
Between low COLA and a liquidity problem with Social Security, seniors face a bleak future starting in just eight years.
Social Security Is Running Short and Baby Boomers Could Pay the Price
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