It is almost time for Christmas and the New Year. There are a lot of seniors and people who get government aid who are already thinking about the future and how the cost of living adjustment (COLA) they will get in January 2025 will change their money and Facebook checks.
Every year, things change, but since the outbreak, things have changed a lot, so we will need to look at the situation again to make the best call.
The Social Security Administration (SSA) announced on October 10 that the 2.5% COLA will be added to all payments starting in January 2025. People who get these checks will still be able to buy things over time because the checks will keep up with inflation.
The SSA is in charge of five programs: old age security, disability insurance, retirement, and extra money for people who have lost a spouse. It does not matter how much money is in the check; all of these programs will get the same amount of the change.
A lot of people are unhappy with this change, especially since it is not as big as it has been in the past.
Also, inflation quickly rose above the 2024 COLA in the first quarter of the year, which meant that the COLA was no longer useful. Users are not as sure of their new, higher benefit because they think this will happen again.
How do you figure out the Social Security COLA?
The Consumer Price Index for Urban Wage Earners and Clerical Workers, which is provided every month by the Bureau of Labor Statistics, is used by the SSA to figure out the COLA every year.
It shows the average change in prices for consumer goods and services.
This is a problem, especially for people who work to help seniors, because the index is clearly geared toward the needs of young workers, and since most of the recipients are seniors, it doesn’t take their needs and costs into account correctly.
In a release about the latest COLA news, TSCL Executive Director Shannon Benton said the following.
“Our study shows that 67% of seniors get more than half of their income from Social Security, and 62% are afraid that their retirement income won’t even be enough to cover basic needs like food and medical bills.”
The league also said that a recent poll of 3,000 older Americans found that 72% of those asked thought that Congress should make it a top goal to change the calculation to an index that better shows how seniors’ costs are changing.
There are a few ideas for how to fix this problem, but one of the most popular and sensible is to use the CPI-E. This is the same index as the CPI-W and uses the same metrics, but it gives more weight to costs like housing and healthcare for people over 62.
This may seem unfair, but the truth is that almost everyone who is vulnerable and needs help from the government has the same worries.
Using the CPI-E, which has been shown over and over to be a higher adjustment, could increase benefits for everyone, not just seniors.
Do not worry if you have not yet calculated your benefits; the SSA will soon send out letters explaining the change and how it will affect your benefits. You will be able to see the letter online if you already have a my Social Security Account.
Which government perks use COLA to make changes?
Not like most people think, the SSA is not the only government agency that changes benefits with the COLA.
This number is also used to figure out raises for people who qualify for Medicare and the Supplemental Nutrition Assistance Program, which includes food stamps and other programs. Because of this, beneficiaries should know about it as one of the most useful metrics.
