Millions of Americans received their first social security checks from 2025 – and they are larger. But enough?
American retirees receive their first social security checks from 2025, and yes, they are larger – but not much. Adjusting the cost of living by 2.5% (Cola) means that the average monthly benefits increased by around $ 50, which brings the typical check to $ 1,976.
But an increase is an increase, right? So why do so many elderly people still feel like you are late?
The answer is simple: for many, that additional $ 50 barely work their daily bills. Housing, health care and food costs all exceed cola, leaving many pensioners with the same feeling of shipwreck that social security does not follow and that their purchasing power is shrinking.
“There is not a single county in the country where average social security services cover an adequate lifestyle,” CNBC Jan Mutchler, gerontology professor at the University of Massachusetts in Boston, told CNBC.
Living in social security alone is difficult, but for many, the safety net represents their main or unique source. In mid-2014, Social Security Administration said that among the beneficiaries aged 65 and over, 37% of men and 42% of women receive half or more from their social security income. And among these 65 and over, 12% of men and 15% of women rely on Social Security for 90% or more of their income.
The average household cleaning spends nearly $ 1,787 per month in housing, including mortgage payments, property taxes, insurance and maintenance, according to data from the US labor statistics office. It is almost an entire average social security check that has disappeared before covering food or public services.
Another financial burden, increasingly increasing than most other expenses. Fidelity estimated that a 65 -year -old retiree leaving work in 2024 could expect to spend an average of $ 165,000 on medical expenses throughout their retirement. Medicare bonuses, co-paids, over-the-counter medicines and unconditional expenses eat an ever-increasing part of social security benefits.
“For most Americans, the difficulty with affordable drugs is not greater than those that cost thousands of dollars,” said research director at Goodrx, an online platform that online that Help the elderly find affordable prescription drugs.
“It is a question of providing routine drugs for chronic conditions and of finding that their insurance does not cover what it was doing.”
Then there is the inevitable cost and the increase in food and transport. As the retirees cover their essential expenses, the total can exceed their monthly advantage.
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Social security cola is supposed to help retirees maintain their standard of living by following the pace of inflation. But there have been questions about the question of whether the consumer price index for employees and office employees (CPI -W) – the index used to calculate the cola – precisely reflects the models of expenses of retirees. In addition, annual adjustments can happen long after inflation has increased prices for everyday items.
The problem has been particularly clear in recent years. In 2023, retirees saw a cola of 8.7%, one of the largest increases in decades, but a full year after inflation increased by almost the same proportion.
By 2024, the adjustment fell to 3.2%, and now, for 2025, it fell again to 2.5%. Meanwhile, key expenses and health care and rent continued to climb faster. For many retirees, this means that even when they get an increase, it may not feel as an increase.
For decades, social security was supposed to complete retirement savings, and does not completely replace the income of a retiree. But today, many older Americans have no substantial pensions or savings to fall back.
The US Government Accountability Office reports that in 2022, around half of households with a worker aged 55 and over had no retirement savings, and 32% had no retirement savings or a defined service plan. As costs increase and the purchasing power of social security decreases, retirees can reduce expenses, return to work or risk overcoming their money.
While the beneficiaries of today social security have attacked a reduced purchasing power, statistics concerning social security workers should serve as alarm to young workers. Based only on social security for retirement can be a dangerous bet. Savings construction via 401 (K) s, individual retirement accounts (IRA) and other investments is more crucial than ever.
Otherwise, they could find themselves in the same situation as the current retirees, looking at their social security checks develop a little each year, but never enough to actually follow.
This article only provides information and should not be interpreted as advice. It is provided without guarantee of any kind.
