Inflation has been a persistent issue over the last few years, affecting the cost of everyday items, and leaving many retirees feeling the pinch. While the annual cost-of-living adjustment (COLA) to Social Security checks is designed to help keep pace with rising prices, the reality often falls short.
The Annual Social Security Adjustment
Each year, Social Security recipients can expect a cost-of-living adjustment, which is intended to help them keep up with inflation. However, this year, the adjustment is only 2.5% which seems inadequate when compared to the actual increase in living expenses. The cost of basic necessities, like groceries, has seen significant increases, but the increase in Social Security benefits are not sufficient to cover these expenses.
The current adjustment does little to address the financial challenges retirees face. With inflation still a significant concern, many will struggle to make ends meet, relying primarily on their Social Security checks.
The Impact of Rising Costs
The disparity between the official inflation rate and actual living expenses, raises concerns for retirees. The COLA is intended to protect the purchasing power of Social Security benefits. However, retirees have to bear the brunt of rising costs without sufficient support.
Looking Ahead to 2025
As we look forward to 2025, it’s crucial for retirees to plan for tighter budgets. With the current COLA failing to keep pace with inflation, those relying primarily on Social Security will face financial challenges. Retirees will need to explore additional income sources, or consider savings strategies to bridge the gap between living costs and stagnant benefits.
Retirees and their families need to stay informed about changes to Social Security and other financial policies affecting them. There needs to be more accurate and meaningful adjustments to Social Security benefits to ensure that retirees can afford living costs.
This crisis further illustrates the need to do good estate planning. We don’t want retirees don’t lose their life savings to long term care expenses so planning ahead where possible is crucial. If this resonates with you, please register to attend one of our Three Secrets to Protect Your Legacy Workshops. Register on our website: sechlerlawfirm.com/workshops
