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2025 saw lowest inflation in 5 years, but seniors are still struggling! - 401kSpecialist
The federal Bureau of Labor Statistics (BLS) is the government’s watchdog for inflation, and BLS recently announced that the 2025 actual inflation rate was 2.7% – the lowest since the year 2020. Lower inflation is, of course, a good sign, but keep this in mind: lower inflation still means that consumer prices are going up, only not as fast and as much as in previous years. Inflation is measured by the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) which resulted in the annual 2.8% Cost of Living Adjustment (COLA) received in 2026 by all who are on Social Security. Good news is that the average Social Security benefit has topped $2,000 per month (actually, $2,015) for the first time ever, but that is small comfort for many seniors. According to a recent survey, about 53% feel that their retirement income won’t be enough to cover their essential daily living costs.
Very early predictions suggest that inflation for 2026 is likely to be about 2.5%, thus forecasting a continued easing of inflation. That, of course, is good for our pocketbooks, but likely means another anemic COLA increase next year, exacerbating the financial dilemma seniors are facing. And all of this is made worse by the continuing rise of healthcare costs, as is explained in this 401kSpecialist article by Brian Anderson.
If you’re unsure about how these basics apply to you, or if you have any questions about your individual situation under Social Security, note that the AMAC Foundation provides a free-to-the-public advisory service to help Americans navigate the complexities of this program. All questions are answered quickly, at no charge. Learn more about it here…