When things look hopeless, you can get back on track if you play your cards right. People who get Social Security can get an annual cost-of-living adjustment (COLA).
The goal of these COLAs is to make sure that benefits can keep up with inflation. Some people have kept getting Social Security checks for decades. To be honest, it would not make sense to limit beneficiaries to the same monthly amount every year.
In the meantime, Social Security checks will get a 2.5% COLA in 2025. You might not be happy with that raise for the reasons below.
New Social Security checks come with some problems to be addressed
This will be the lowest cost of living adjustment (COLA) in years
There has never been a cost of living adjustment (COLA) that was this low. There were many years when there was no COLA added to Social Security checks. But after recent annual increases, a 2.5% COLA seems like a small amount.
Seniors’ Social Security checks went up by 3.2% in January of this year. A COLA of 8.7% was given to Social Security the year before. Also, the COLA was 5.9% the year before. In fairness, people of all ages have had to deal with high inflation in the past few years.
A lower COLA also shows that inflation is finally starting to slow down. Still, it is hard to be excited about a 2.5% COLA when you think about the last raise seniors got.
COLAs don’t tend to keep up with inflation
Because inflation is pretty low, Social Security checks will only go up by 2.5% in 2025. Seniors were still let down by them, though, even when COLAs were higher.
A nonpartisan group called the Senior Citizens League said that Social Security retirees had lost 36% of their purchasing power since 2000 as of last year. The reason for this is that the program’s COLAs have not been enough.
As a result of changes to the Consumer Price Index for Clerical Workers and Urban Wage Earners (CPI-W), Social Security COLAs are set.
But a lot of people who get Social Security do not live in cities and a lot of them do not work. So, it is easy to see why the CPI-W would not accurately reflect the costs that people who get Social Security often have.
How can beneficiaries deal with lower-than-expected Social Security checks?
You may be disappointed to learn that your Social Security checks will only go up by 2.5% next year. In addition, the chance that Medicare Part B costs will lower your gain is not even taken into account in that raise.
But the simple answer is here if you want to get past that low COLA and make your financial situation better: Try to find some kind of work. Good news.
Thanks to the gig economy, working after retirement does not have to be a bad thing. Instead, you might be able to make money by doing something you enjoy. Here are a few examples:
- If you play an instrument, consider performing at cafes or pubs.
- If you enjoy experimenting in the kitchen, consider selling baked products at farmer’s markets or festivals.
- If you love animals, consider caring for other people’s pets.
- If you are handy enough, you can design unique furniture.
You might have to take on a less “fun” job in retirement, like driving for a ride-hailing service, to make a good amount of extra cash. But those are just a few options.
It might help if you need extra money, but the Social Security COLA next year probably will not get you much.
You would be smarter to get things done yourself and look for a way to make money. Finally, it is important to note that your new job may bring you financial, mental, and emotional stability, which could lead to a more satisfying life.
Also see:-Goodbye COLA if this happens on Nov. 5 – Everything could change again with Social Security
