Social Security Benefits Get a Cost-of-Living Adjustment (COLA) in 2025. But There Is a Big Problem for Retirees.
Many Americans lack confidence in their ability to live comfortably through retirement. In fact, a 2023 survey from the Employee Benefit Research Institute (EBRI) found that confidence decreased more significantly last year than at any point since the Great Recession in 2008.
Craig Copeland, director of Wealth Benefits Research at EBRI, attributed the problem to "the current economic climate, in particular inflation." Indeed, prices across the economy increased at their fastest pace in decades post pandemic and inflation remains elevated today. As a result, 55% of the retirees surveyed by EBRI in 2024 worry they will need to make substantial spending cuts.
Of course, the purchasing power of Social Security is theoretically protected by cost-of-living adjustments (COLAs). In fact, benefits received COLAs of 5.9% in 2022 and 8.7% in 2023, two of the largest raises in program history. But that calls into question whether COLAs are truly keeping up with inflation.
Source Fool.com
