Shocking COLA update: Why half of retirees are rethinking their plans!
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In the golden years of life, retirement is often envisioned as a time of leisure, relaxation, and the pursuit of long-held passions.
However, a recent and startling revelation has emerged that could see many seniors reevaluating their retirement dreams.
Social Security, a program that supports retirees, individuals with disabilities, and survivors of deceased claimants, is a lifeline for tens of millions each year.
The Cost-of-Living-Adjustment (COLA), designed to help these benefits keep pace with inflation, is calculated based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).
Yet, the latest adjustment seems to fall short of the growing financial needs of our senior population.
A survey conducted by The Motley Fool has uncovered that a staggering 50% of American retirees are contemplating a return to the workforce.
This bombshell comes on the heels of an announcement by the Social Security Administration (SSA) regarding a modest 2.5 percent Cost of Living Adjustment (COLA) for benefits in 2025—the smallest increase in recent memory.
The survey's insights are alarming: 54 percent of retirees believe the 2025 COLA is inadequate.
In contrast, previous years saw more substantial increases, with an 8.7 percent rise in 2023 and a 3.2 percent hike in 2024.
The current average monthly Social Security payment, even after the 2024 increase, stands at $1,907, which is less than half of the $5,007 monthly expenses reported by Americans aged 65 and older in 2023.
With only 54 percent of American households having a retirement account in 2022, the financial strain is palpable.
The Motley Fool's research indicates that 28 percent of seniors rely solely on their Social Security benefits, while another 32 percent depend heavily on them.
This means that a significant 60 percent of American seniors are financially anchored to their Social Security payments.
Retirement is more than just a financial equation; it's a lifestyle choice.
While some may return to work for a sense of purpose or structure, the survey suggests that financial stability and maintaining one's lifestyle are the primary motivators for those considering reemployment.
Further research by The Senior Citizens League (TSCL) underscores the inadequacy of the annual COLA.
Their findings show that the average Social Security payment in 2024 has the purchasing power of just 80 cents compared to a dollar in 2010.
TSCL advocates for a shift in the COLA calculation to the CPI-E, which tracks the spending habits of Americans aged 62 and older, arguing that it would more accurately reflect the changing expenses of seniors.
The call for action is clear: seniors and advocacy groups like TSCL are urging Congress to strengthen COLAs.
They propose a minimum COLA of 3 percent and a shift from the CPI-W to the CPI-E to ensure that Americans can retire with dignity.
With 67 percent of seniors depending on Social Security for over half their income and 62 percent worried about covering basic necessities, the need for reform is urgent.
Have you felt the pinch of the COLA adjustments? Are you considering returning to work, or have you found other ways to supplement your income? Share your thoughts and opinions in the comments below.
However, a recent and startling revelation has emerged that could see many seniors reevaluating their retirement dreams.
Social Security, a program that supports retirees, individuals with disabilities, and survivors of deceased claimants, is a lifeline for tens of millions each year.
The Cost-of-Living-Adjustment (COLA), designed to help these benefits keep pace with inflation, is calculated based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).
The Social Security Administration announced a 2.5 percent Cost of Living Adjustment for 2025, the lowest in several years, causing retirees to struggle financially. Image source: Pexels.
Yet, the latest adjustment seems to fall short of the growing financial needs of our senior population.
A survey conducted by The Motley Fool has uncovered that a staggering 50% of American retirees are contemplating a return to the workforce.
This bombshell comes on the heels of an announcement by the Social Security Administration (SSA) regarding a modest 2.5 percent Cost of Living Adjustment (COLA) for benefits in 2025—the smallest increase in recent memory.
The survey's insights are alarming: 54 percent of retirees believe the 2025 COLA is inadequate.
In contrast, previous years saw more substantial increases, with an 8.7 percent rise in 2023 and a 3.2 percent hike in 2024.
The current average monthly Social Security payment, even after the 2024 increase, stands at $1,907, which is less than half of the $5,007 monthly expenses reported by Americans aged 65 and older in 2023.
With only 54 percent of American households having a retirement account in 2022, the financial strain is palpable.
The Motley Fool's research indicates that 28 percent of seniors rely solely on their Social Security benefits, while another 32 percent depend heavily on them.
This means that a significant 60 percent of American seniors are financially anchored to their Social Security payments.
Retirement is more than just a financial equation; it's a lifestyle choice.
While some may return to work for a sense of purpose or structure, the survey suggests that financial stability and maintaining one's lifestyle are the primary motivators for those considering reemployment.
Further research by The Senior Citizens League (TSCL) underscores the inadequacy of the annual COLA.
Their findings show that the average Social Security payment in 2024 has the purchasing power of just 80 cents compared to a dollar in 2010.
TSCL advocates for a shift in the COLA calculation to the CPI-E, which tracks the spending habits of Americans aged 62 and older, arguing that it would more accurately reflect the changing expenses of seniors.
The call for action is clear: seniors and advocacy groups like TSCL are urging Congress to strengthen COLAs.
They propose a minimum COLA of 3 percent and a shift from the CPI-W to the CPI-E to ensure that Americans can retire with dignity.
With 67 percent of seniors depending on Social Security for over half their income and 62 percent worried about covering basic necessities, the need for reform is urgent.
