Social Security payments to rise 2.5% next year for seniors

The Social Security Administration is expected to announce a cost of living adjustment (COLA) for payments to 71 million Americans in mid-October, which will take effect in January 2025. The Senior Citizens League anticipates a 2.5% increase based on recent inflation data, which showed a decrease from 2.9% in July to 2.5% in August. This adjustment is calculated using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) over the months of July, August, and September. Despite the anticipated increase, the Senior Citizens League warns that this adjustment may not be sufficient for seniors to cope with rising living costs. Approximately two-thirds of seniors rely on Social Security for more than half of their monthly income, while 28% depend on it entirely. This highlights the financial vulnerability of many older Americans, who may struggle to meet their basic needs even with the proposed increase. In the broader financial landscape, retirement-oriented dividend stocks and exchange-traded funds (ETFs) have shown mixed performance. Stocks like Coca-Cola and Wells Fargo have seen gains, while others like Anheuser-Busch InBev and Microsoft experienced slight declines. This reflects the ongoing volatility in the market, which can impact the financial security of retirees who invest in these assets. Overall, the expected COLA increase, while beneficial, may not adequately address the financial challenges faced by seniors. As inflation continues to affect living costs, there is a pressing need for policies that better support the financial well-being of older Americans.