Most seniors say this year's Social Security increase isn't enough — in fact, almost all of them say so.
As 2025 begins, Social Security checks are getting a 2.5% boost, called the cost-of-living adjustment (COLA), to cope with inflation. But according to a
"Cost-of-living adjustments are not keeping pace with seniors' actual expenses, leaving a lot of seniors at a financially insecure perch," said Merritt Ryan, a data analyst at Atticus.
Over the past few years, the COLA has followed the roller coaster of post-pandemic inflation. After the soaring prices of 2022, seniors received an unusually generous
This year's 2.5% COLA — though close to the 20-year average of 2.6% — is the lowest since 2021. And seniors aren't happy about it.
"Many seniors may have become accustomed to more significant adjustments that provided some relief from growing costs," Ryan said. "Coming in below both the 3.2% in 2024 and the 8.7% increase in 2023, a 2.5% raise likely feels like a step backward at a time when expenses are still high."
Atticus surveyed 672 Americans aged 62 and older, and 75% of them said Social Security's COLAs aren't keeping up with their cost of living. On average, respondents said an appropriate adjustment for 2025 would be 11.3% — almost five times the actual COLA.
In particular, one expense that has outpaced these benefits is Medicare. At the start of 2025, the standard Medicare Part B premium jumped by 5.9% —
"People with lower benefits … may find that their Medicare premiums swallow up the bigger part of their COLA boost — sometimes the entire amount," said Mary Johnson, a retired Social Security analyst formerly at
Atticus measured the impact of this problem as well. Thirty-seven percent of seniors said this year's higher Medicare premiums forced them to reduce their non-essential expenses, and 21% said they had to alter their budgets significantly.
The result is a lot of frustration among retirees — something many financial advisors have noticed.
"Clients are annoyed by the Social Security COLA," said Noah Damsky, founder of
Thomas Scanlon, a certified financial planner at
"Almost no one is thrilled with the COLA," Scanlon said. "Inflation is very visible when you go into the grocery store or pay your car or homeowners insurance. It hurts."
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How can financial advisors help? One way is to remind retirees of their options — which include going back to work.
"The good news is that, if they want to and are able to work, there is likely a job for them," Scanlon said. "It may not be at the pay rate they want or the hours that they want. … [But it's] a way to try and stay even with inflation."
Many seniors have already chosen this option. Twenty-seven percent of Atticus' respondents said they plan to do freelance work to make ends meet in 2025, and 24% plan to work part-time jobs. Another 9% plan to work full-time.
There are also other ways to cut costs. As Damsky pointed out, clients can switch to higher-deductible car or home insurance plans, which tend to be cheaper. And for those who have Roth IRAs, Scanlon suggested, retirees can start making tax-free withdrawals as long as they're over age 59½.
All of these methods can help make up for the lower-than-usual growth in Social Security checks. But that doesn't mean seniors are pleased about it.
"I'd be very surprised if anybody was happy or satisfied with that COLA," Johnson said.
