Social Security recipients can expect next year’s annual cost-of-living adjustment (COLA) to be the lowest since 2021, following cooler inflation readings in July and August.
On Wednesday, the Bureau of Labor Statistics reported the consumer price index climbed 2.5% year on year.
Combined with the 2.6% reading in July, and a similar reading expected for September, Social Security beneficiaries are on track to see a payment increase of about 2.5%, according to The Senior Citizens League, an advocacy group.
That equates to an increase of about $46.80 per month.
While the lower COLA forecast reflects an economy that is enjoying a slower pace of price growth, Social Security advocates say seniors and others on fixed incomes are uniquely affected by the inflationary environment.
They are less able to seek alternative sources of income, and are exposed to a different set of goods and service prices compared with the rest of the population, experts say.
“Inflated prices persist on key essentials such as housing, meats, auto insurance, any type of service and repairs,” Mary Johnson, an independent Social Security analyst, said in a release.
The situation is likely to remain especially dire thanks to rising costs for Medicare Part B, the portion of Medicare that helps pay for things like ambulance services, some medical equipment and clinical research.
Earlier this year, the Medicare Board of Trustees estimated that the Part B premium, which is automatically deducted from monthly Social Security checks, would climb by $10.30, or 5.9%, to $185 per month in 2025.
Johnson said that amount would equate to about one-fifth of the expected overall increase entailed by a 2.5% COLA.
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