2025 COLA - 2.5% implies inflation is easing, but buying power hasn’t improved! - Motley Fool
Following the COLA increases Social Security recipients received in the past several years (8.7%, 5.9% and 3.2%), this year’s cost of living adjustment seems paltry. Actually, it is more of a return to normal, because the average annual COLA over the past two decades has been about 2.6%. Nevertheless, senior citizens continue to lose buying power because a lower COLA doesn’t mean consumer prices are going down - they’re just not rising quite as fast as the previous years. Thus, relying on savings takes on an increasingly important role, and perhaps considering part-time work to offset household expenses is in the cards. This Motley Fool article by Katie Brockman discusses the 2025 COLA, and reveals that those on Social Security have lost about 20% of their buying power over the past decade.
This related article, published by the AMAC Foundation, also addresses this topic.
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