CW: Poverty
According to updated projections, the cost-of-living adjustment (COLA) estimate for people who receive Social Security benefits and Supplemental Security Income next year continues to decline as inflation falls further.
Mary Johnson, an independent Social Security and Medicare policy analyst who tracks and calculates COLA estimates says Social Security’s cost-of-living-adjustment (COLA) in 2025 is expected to be 2.5%. This is lower than the previous month’s estimate of 2.6% and lower than the 3.2% increase in 2024.
A 2.5% COLA would increase the average retiree benefit of $1,870 per month by approximately $46.80 (rounded to the nearest dime). The maximum monthly SSI benefit is currently $943. An increase of 2.5% would mean the new maximum monthly benefit amount would be approximately $989.80.
As long as prices for goods and services remain high, the increase will not be enough to assist retirees and disabled people with paying their bills. “The 2025 COLA will be the lowest received by Social Security beneficiaries since 2021, at the same time inflated prices persist on key essentials such as housing, meats, auto insurance, any type of service and repairs,” says Johnson.
Unsurprisingly, more seniors and disabled Americans are living in poverty. In 2022, over 26% of disabled people in the United States lived in poverty, compared to 11.5% of people without disabilities.
The Census Bureau also stated that an increasing proportion of seniors had fallen into poverty each year since 2020. Social Security benefits have lost 20% of their purchasing power since 2010, as the cost of products that seniors and disabled people most frequently spend their money on has risen faster than inflation. This means that for every $100 spent on groceries in 2010, a household can only afford around $80 today, according to the report.
In addition, as of June, weekly household expenditures for food at home averaged $131. The same food cost $123 in July 2023, according to a study released by Purdue University. A yearly increase of $416 is something many Social Security beneficiaries cannot afford.
When it comes to housing, there is nowhere in the country where an SSI beneficiary can reasonably afford an apartment, according to a report published in February by the Technical Assistance Collaborative. Nationwide, the average rent for a basic studio or one-bedroom apartment exceeds the average monthly SSI benefit of $983. Even in the country’s cheapest rental market, Dallas County, MO., the rent for a one-bedroom or efficiency apartment would be 64% of a person’s monthly SSI benefit.
Given the high cost of housing, it shouldn’t come as a surprise that many disabled people have experienced housing insecurity. According to the National Law Center on Homelessness & Poverty, 38.6% of sheltered, unhoused people in America are disabled. They are also more likely to experience chronic homelessness. In January 2017, 24% of people experiencing homelessness, or about 87,000 people, had a disability and were chronically homeless. People experiencing chronic homelessness have been homeless for at least a year or have had at least four periods of homelessness, totaling twelve months in the previous three years.
For seniors, the problem is just as bad. According to data from Harvard University’s Joint Center for Housing Studies, the number of homeless people 65 and older increased sixfold between 2019 and 2021. Senior homeowners’ principal sources of income are Social Security benefits, pensions, and retirement funds.
Additionally, between 2016 and 2021, the population of cost-burdened seniors — older adults who spent 30% or more of their income on housing alone — increased by 1.5 million to an all-time high of 11.2 million in 2021. The problem is anticipated to worsen in the coming years. By 2040, the number of homeowners aged 80 and older is predicted to more than double, reaching over 17 million.
Social Security beneficiaries should not have to worry about affording food, utilities, or housing. Everyone should be able to afford all of their basic expenses. Millions of Americans rely on Social Security benefits, which should provide a livable income.
Sources:
Balagtas, Joseph, and Elijah Bryant. “Consumer Food Insights.” Center for Food Demand Analysis and Sustainability (CFDAS), The College of Agriculture at Purdue University , 11 June 2024, ag.purdue.edu/cfdas/data-resources/consumer-food-insights/.
Diament, Michelle. “SSI Recipients Can’t Afford Housing Anywhere in the US.” Disability Scoop, 5 Feb. 2024, http://www.disabilityscoop.com/2024/02/05/ssi-recipients-cant-afford-housing-anywhere-in-the-us/30731.
“Housing America’s Older Adults 2023.” The Harvard Joint Center for Housing Studies , Harvard University , 11 Dec. 2024, http://www.jchs.harvard.edu/sites/default/files/reports/files/Harvard_JCHS_Housing_Americas_Older_Adults_2023.pdf.
Homelessness in America: Overview of Data and Causes.” The National Law Center on Homelessness & Poverty, The National Law Center on Homelessness & Poverty, 2018, https://homelesslaw.org/wp-content/uploads/2018/10/Homeless_Stats_Fact_Sheet.pdf.
Shrider, Emily A., and John Creamer. ‘Poverty in the United States: 2022’. US Census Bureau, 2023.
Wile, Rob. “Social Security Cola 2025: Seniors Can Expect Lowest Cost-of-Living Increase since 2021.” NBCNews.Com, NBCUniversal News Group, 11 Sept. 2024, http://www.nbcnews.com/business/consumer/social-security-cola-2025-seniors-can-expect-lowest-cost-living-increa-rcna170487.