There are certain things that are kept in mind of retirees, and among them is what will happen if their Social Security Benefit does not increase in future? It is being held by experts that a rise in inflation would certainly decrease the buying power of the increase in Social Security benefits over the time. And if that happens, many retirees will be in a drastic situation.
But on the other side, there is good news that the benefits keep on increasing every year, and hence it keeps a check over inflation. And for this check, “Cost of Living Adjustment” COLA is calculated every year. And after the calculations, it is applied to Social Security Benefits every year, so the retirees do not get outdated.
However the sad part is about 2025 COLA, that it is not going to be beneficial for the beneficiaries.
Where is COLA heading to?
At the moment, no one can predict what 2026 COLA would be. The increase in the benefits will not be announced till October. The Social Security Administration calculate the COLA on through the statistics which is being obtained through U.S. Bureau of Labor. And here, SSA has to wait for the month of September for the inflation data for the calculation of COLA.
Nonetheless, it cannot be said that we cannot guess anything about 2026’s COLA. There is a Non Profit Organization named as “The Senior Citizen League”, which is an ombudsman for the senior citizens. It crunches the number every month, which helps in predicting the next COLA.
And seeing all these things. There is a visible pattern for consecutive four months. It can be clearly seen that the projection is increasing continuously. The latest projected COLA from the NGO is 2.5 percent more than 2.4 percent from the previous month.
There is a rise seen in the inflation, which is clearly reflected in the projection of COLA. And more surprisingly, the increase in the trend has been maintained from the past four months. It is also being predicted that the inflation will increase in the second half of 2025, and experts says it is due to the policy changes under the Trump Administration,
COLA’s primary goal is to protect recipients’ Social Security income from growing inflation. And it is being said that the retirees would be facing a situation of no win, especially if the rate of inflation kept on rising. Let’s take a closer look at that.
Time works against them! (beneficiaries).
How? As they will be paying higher prices for their need to fulfill them now. But they won’t be receiving any sort of increase in the SSI paychecks until later in the year.
It is being reported that COLA for 2026 won’t get live until January next year.
Is the Metric standing still with time?
The straight forward answer to this is “NO”. Let us check how this happened. The Consumer Price Index for Urban Wage Earners and Clerical Workers is being used for calculating the SS Cola. Although it is an urban wage metric, it generally measures only the increase with respect to Blue Collars who generally live in bigger chunks of the population.
And the experts highlight the primary issue as, the CPI-W primarily focuses on the citizens of America rather than the SSI Beneficiaries.
Many experts and the organisation have the opinion that there are alternative metrics which can be used. One of them is “Consumer Price Index for the Elderly”. Experts have the opinion that it would be reflecting the rising inflation with more accuracy and certainly the impact will clearly be visible.
