by Shanique Yates
July 12, 2024
The Senior Citizens League reports that those living off Social Security continue to see an uptick in the cost of living despite declining inflation rates.
Inflation rates are decreasing, but the cost of living for Social Security recipients continues to rise.
The Senior Citizens League reports that nearly half of Social Security recipients continue to rely on monthly checks to survive. “About 50% of senior households depend on Social Security as the difference between [staying out of] poverty,” said Alex Moore, Senior Citizens League Social Security and Medicare statistician.
A 2021 report conducted by the Social Security Administration (SSA) reveals that 33% of Black and Hispanic people make up the amount of adults over age 62 who currently rely on Social Security due to lack of other income during their retirement years. On the other hand, 16% of their white counterparts count on the government-led program for their livelihood. Moreover, minorities are often responsible for taking care of others in their household, thus, making the need for Social Security more dire than others.
Living on a fixed income means that every penny counts. According to the Senior Citizen League’s most recent membership survey, 34% of retirees admitted to visiting a food pantry or applying for food stamps within the last 12 months, which may not change any time soon, given a recent forecast of the Social Security cost-of-living adjustment also known as COLA.
While it is estimated that they can expect an increase of 2.63% on their monthly checks in 2025, it is not a huge difference from the 2.57% forecasted in June.
“Social Security’s cost-of-living adjustments (COLAs) are based on the average inflation rate during the third quarter, the three-month period that includes July, August, and September. Curiously, COLAs are calculated using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), a subset of the better-known CPI-U,” according to Motley Fool.
In 2023, the COLA calculation was 8.7%,. However, the forecast for 2025 was 3% in June ,and it has recently slipped to 2.7% following reports that inflation declined more than what was previously anticipated last month.
While the most recent report shows that Social Security recipients may start to see their checks fall behind the overall pace of inflation, it is important to note that price surges are likely at any time of the year. The COLA may not account for the changes. The official forecast for the next year is generally announced in October.
As the economy continues to grapple with the effect that COVID-19 had on society both during and after, there has been a reported 20% increase in CPI-W from January 2020 to December 2023. The COLA only rose by 19% in that timeframe.
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