New York — There’s a particular stillness in the early hours of the morning, the kind that invites quiet reflection. For millions of Americans, especially those relying on Social Security, that stillness often carries the weight of questions—Will it be enough? What will next year look like? These questions become even more pressing as we approach October 10, the day the Social Security Administration (SSA) will announce the new Cost of Living Adjustment (COLA) for 2025.
This year, the news isn’t as bright as many had hoped. But hope, like the resilience of those who have worked their entire lives, endures. The increase—expected to be around 2.5%—is smaller than in previous years. For retirees, this feels like an echo of something familiar yet always unwelcome. A subtle tightening, a reminder that even in retirement, uncertainty lingers.
Smaller COLA for 2025: Reflection of Lower Inflation
The word “adjustment” often conjures images of minor tweaks, small changes that one can easily accommodate. But when it comes to your Social Security benefits, the annual COLA adjustment feels anything but small. And this year, that adjustment is shrinking to just 2.5%, down from 3.2% in 2024 and dramatically lower than the 8.7% surge seen in 2023.
Why? It’s simple and yet so complex: inflation is slowing. The Bureau of Labor Statistics (BLS) has reported a drop in the inflation rate—using the CPI-W index as the measure—and while that may seem like a good thing, it doesn’t always translate to relief for those on fixed incomes. You see, inflation is a fickle beast, and even when the overall rate declines, prices in certain sectors, like food and healthcare, still rise.
Imagine trying to stretch a blanket on a cold winter’s night, only to find that no matter how hard you pull, it never quite covers your feet.
For Social Security recipients, that blanket feels like it’s shrinking each year. COLA, meant to keep retirees and disabled Americans in step with rising costs, doesn’t always do the job. Even a 2.5% increase can feel like a drop in an ocean when food prices have risen by 2.7%, and medical costs continue to grow.
The Silent Thief: How Medicare Part B Reduces Your COLA
It’s easy to get excited about any increase, even a modest one. But there’s a shadow that often looms over these COLA announcements: Medicare Part B premiums. Many retirees have their Part B premiums deducted directly from their Social Security checks, and those premiums often increase each year.
Let’s take a closer look. If the COLA increase for 2025 indeed amounts to an average of $48 a month, a rise in Medicare premiums—estimated at $12 a month—could quickly eat away a quarter of that boost.
It’s the silent thief that many beneficiaries don’t see coming. And it happens so quietly, without fanfare, like a gentle erosion that only becomes apparent once it’s too late. That $48 bump is suddenly $36, and when food and healthcare costs are rising faster than inflation, it feels as though you’re running in place.
As retirees weigh the potential changes, it’s important to remember that even with these increases, the actual purchasing power of Social Security has been steadily declining for over two decades.
Why Social Security COLA Falls Short: The 36% Loss in Purchasing Power
Since 2000, Social Security recipients have lost 36% of their purchasing power, according to a report from The Senior Citizens League (TSCL). This statistic is more than just numbers on a page—it’s a reflection of lives quietly adjusted. A reflection of skipped dinners out, postponed vacations, and the ever-present anxiety about unexpected medical bills.
It’s not just inflation; it’s the way inflation is measured. The SSA uses the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) to calculate COLA, but retirees don’t spend like urban wage earners. They spend more on healthcare and housing, and less on transportation and recreation. Some advocates argue that the Consumer Price Index for the Elderly (CPI-E) would better reflect the rising costs faced by older Americans.
But that change remains just out of reach. The Social Security 2100 Act, introduced by Congressman John Larson, aims to address this by shifting the COLA calculation to CPI-E. It’s a proposal that offers hope, but like many things in Washington, it’s moving slowly.
For now, retirees are left with an imperfect system that offers some relief but often falls short of fully addressing the financial realities of aging.
Ray of Hope? Advocating for a Fairer COLA Calculation
There is, however, a growing movement to fix this. TSCL and other advocacy groups continue to push for changes like those outlined in the Social Security 2100 Act. They argue that a more accurate reflection of retirees’ spending patterns—by switching to the CPI-E—could give them the boost they need.
But for those currently living on Social Security, hope for change feels distant. It’s not the immediate, life-altering relief that many need today. It’s a promise for tomorrow. And while promises offer comfort, they don’t pay the bills.
That said, every voice matters in this fight. Every story shared by a retiree feeling the squeeze of inflation, every letter written to a representative demanding change—it all counts. It’s in these small acts of advocacy that real change begins.
The Uncertain Road Ahead: Preparing for What’s Next
As we look toward January 2025, when these adjustments will take effect, it’s worth asking ourselves what preparation looks like. For many retirees, the road ahead feels uncertain. A smaller COLA is just one part of a larger, more complicated financial puzzle.
Maybe this is a moment to re-evaluate, to reach out to financial advisors, to consider additional support programs, or even to talk with loved ones about what the future might hold. These are conversations filled with vulnerability, but they are necessary.
And if there’s one thing we’ve learned from the past few years, it’s that uncertainty is the new normal. But just as we’ve navigated uncertainty before, we’ll find a way through this, too. After all, we’ve faced harder moments, and somehow, we’re still here, still holding on, still stretching that blanket as far as it will go.
Final Reflection: Future Shaped by Advocacy and Resilience
The story of Social Security is not just about numbers—it’s about people. It’s about the quiet resilience of millions of retirees who have spent decades working and contributing, only to find themselves navigating a system that often doesn’t keep pace with their needs. Yet, they press on.
And maybe that’s the most important takeaway. Whether it’s through advocacy, small adjustments, or simply sharing their stories, retirees continue to shape the conversation. They continue to advocate for a system that serves them better, and in doing so, they create a future where the burden might not feel so heavy, where the blanket finally stretches far enough to cover all.
