USA'S HAITI ONA VERSION! LOL!!! LOL!!!! LOL!!!!
Serge Pierre-Pierre
Social Security's cost-of-living adjustment last did this in 1993
Although we don't have any of the CPI-W readings that count toward the 2025 COLA calculation as of yet, the year-over-year CPI-W readings through May 2024 offer big clues as to what's to come. In particular, the CPI-W readings suggest Social Security's COLA is on pace to do something that no one has witnessed since 1993.
In mid-June, the U.S. Bureau of Labor Statistics released the May inflation report, which showed that the CPI-W had risen by 3.3% on a trailing-12-month basis. This was down a tenth of a percent from 3.4% in the April inflation report. (Note: This article was written before the release of the June inflation report on July 11.)
While the prevailing inflation rate moderated ever-so-slightly in May, at least one estimate still suggests Social Security's cost-of-living adjustment can make history in 2025.
According to independent Social Security and Medicare policy analyst Mary Johnson -- who previously worked for nonpartisan senior advocacy group The Senior Citizens League prior to her recent retirement -- the 2025 COLA is on track to come in at 3%.
Based on Social Security's COLA track record over the last two decades, a 3% cost-of-living adjustment is a pretty big deal. Since 2010, there have been three years with no COLA (2010, 2011, and 2016), along with another year that passed along the smallest COLA on record (0.3% in 2017).
But over the last three years, Social Security's cost-of-living adjustments have come in well above the two-decade average of 2.6%. In 2022, 2023, and 2024, beneficiaries saw their checks rise by 5.9%, 8.7%, and 3.2%, respectively. The 8.7% increase passed along last year was the largest since 1982, and the biggest nominal-dollar boost to Social Security checks since the program's inception.
Where things get "historic" is if Johnson's 3% COLA estimate proves accurate. If so, it would mark the first time in 32 years that four consecutive COLAs have totaled at least 3% (COLAs from 1988 through 1993 ranged from 3% to 5.4%).
In dollar terms, a 3% cost-of-living adjustment would increase the average retired-worker benefit by about $57 per month in 2025. Meanwhile, workers with disabilities and survivor beneficiaries would see their monthly payouts increase by an average of $46 and $45, respectively.
Retirees continue to get the short end of the stick
On paper, you would think that four straight years of above-average COLAs would have retirees sitting pretty -- but this couldn't be further from the truth.
In May of last year, when The Senior Citizens League issued its 2024 COLA guidance, it also released a study that compared cumulative COLAs since the start of the 21st century to price changes in a large basket of goods and services regularly purchased by seniors. Whereas aggregate COLAs between January 2000 and February 2023 increased benefits by 78%, the dozens of goods and services that retirees typically purchase collectively rose in price by 141.4%.
The end result of The Senior Citizens League analysis is that Social Security income has lost 36% of its purchasing power since this century began.
The biggest issue is that the factors responsible for propping up the prevailing inflation rate are the expenses that matter most to seniors. Compared to the average working American, seniors spend a considerably higher percentage of their monthly budget on shelter and medical care.
Shelter has the largest weighting in the CPI-W of any category. With the Federal Reserve undertaking its most aggressive rate-hiking cycle in four decades, mortgage rates have soared, and sales of existing homes have come to a grinding halt. Not surprisingly, rent inflation has remained stubbornly high, which has provided a boost to the CPI-W.
In recent months, we've also witnessed the inflation rate for medical services picking back up.
Even if Social Security's 2025 cost-of-living adjustment comes in at 3%, or slightly higher than Johnson's estimate, it's unlikely to represent a large enough "raise" to offset the inflation that retirees are currently contending with. In short, retirees are liable to get the short end of the stick, once more, in 2025.
The $22,924 Social Security bonus most retirees completely overlook
If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "Social Security secrets" could help ensure a boost in your retirement income. For example: one easy trick could pay you as much as $22,924 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Simply click here to discover how to learn more about these strategies.
View the "Social Security secrets" ›
The Motley Fool has a disclosure policy.
Social Security's 2025 Cost-of-Living Adjustment (COLA) Is on Pace to Do Something That Hasn't Occurred in 32 Years was originally published by The Motley Fool
|
HAITIAN INTERNATIONAL GROUP
"UNE PUISSANCE ÉCONOMIQUE POUR UNE HAITI MODERNE, LIBRE ET PROSPÈRE ". au service des citoyennes et citoyens Haïtiens concernés du globe. Visitez-nous en cliquant sur ce lien :https://higvision.org/