Although the previous Social Security COLA estimates were about 18.% and 2.5%, it could go up due to a higher inflation in March. Inflation seemed to be under control in early January 2024.
However, the latest estimate for the 2025 COLA went up to 3%. That will mean Social Security recipients could collect the same increase if that amount remains the same in the third term of 2024.
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HOW HAVE SOCIAL SECURITY COLA ESTIMATES EVOLVED IN 2024?
So far it has been slightly increasing. It reached almost 1.8% in January. Do not forget that the 2024 COLA was 3.2% and the 2023 COLA was 8.7%. Therefore, January’s COLA estimate was really low.
February was when inflation started to go up again. It was then that the Social Security COLA estimate was nearly 2.5%. March has been no exception and inflation has continued increasing up to 3%.
In case you did not know, the Consumer Price Index (CPI) is closely related to COLA. The CPI was 3.5% in March, affecting Social Security beneficiaries who have a low income.
SOCIAL SECURITY RECIPIENTS ARE LOSING BUYING POWER
Since retirement beneficiaries just got 3.2% extra after the 2024 COLA and the CPI was 3.5 in March, they are losing purchasing power. That means they get the same amount of money, but they can buy fewer things with it.
The Senior Citizens League’s report claimed that retirees on Social Security have lost about 36% of their buying power since 2000. For example, medical expenses are on the rise and seniors frequently need it. Electricity and transport are also increasing. Hence, seniors need to plan their budgets.
In this way, they can make the most of their payments. Not to mention the fact that the income thresholds have not been updated in the last 40 years. Since Social Security retirement benefits have increased, more retirees have to pay taxes. So, something should be done to avoid this burden for retirees in the USA.