Social Security recipients will see their monthly payments inch up by only 2.5% next year, as the steady decline in inflation puts a damper on the program’s annual cost-of-living-adjustment, the Social Security Administration announced Thursday.
Retirees’ monthly payments will rise by about $50 to an estimated average of $1,976 starting in January. Nearly 68 million people receive Social Security payments.
The announcement comes less than a month before the presidential election, where the economy and high cost of living are key concerns for voters.
Next year’s COLA is a far cry from the 8.7% adjustment for 2023, which was the highest in more than 40 years and aimed to help senior citizens and people with disabilities cope with the rapid increase in prices at that time. But the annual boosts have since moderated along with inflation, providing recipients with only a 3.2% bump for this year.
The annual adjustment is based on an inflation metric from the third quarter of the year, which has cooled after being at around a four-decade high two years ago. A related metric, the Consumer Price Index, increased 2.4% in September compared with a year ago, the Bureau of Labor Statistics announced Thursday.
Still, many seniors and their advocates say that the annual adjustments do not keep up with the rising cost of living, particularly now since prices have remained high even as inflation has ebbed.
Before the Covid-19 pandemic, Cindy Christina used to be able to buy four or five bags of groceries and household supplies at Walmart for $150. Now, the Lebanon, Oregon, resident is lucky if she can get two bags for that amount.
A retired medical transcriptionist, Christina and her husband, Wally, rely on Social Security to pay their bills. When they recently needed to replace the brakes on their 1996 Dodge, they had to finance the cost and postpone a nerve test on Christina’s wrist.
