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Epoch Times
13-05-2025
- Business
- Epoch Times
Social Security Payment Adjustments Projected to Be Lowest in Years, Group Predicts
A prominent seniors group predicted that the cost-of-living adjustment (COLA) for next year's Social Security payments will be 2.4 percent, a 0.1 percentage point increase from its prediction last month. In a 'The 2026 COLA is projected to be the lowest since 2021,' the group said in its statement. 'High inflation during the COVID-19 pandemic led to higher-than-average COLAs of 5.9 percent in 2022 and 8.7 percent in 2023.' If the prediction stands, the group says, people receiving Social Security and Supplemental Security Income (SSI) payments will see the lowest adjustment since 2021, when a 1.3 percent COLA was implemented. 'If our predictions come true and the 2026 COLA comes in at the lowest we've seen since 2021, seniors will face additional pressure at a time when they're already strained financially,' the group's director, Shannon Benton, said in the statement. 'Our research shows that 73 percent of American seniors rely on Social Security for at least half their income, with 39 percent depending on the program for all of their income.' The Social Security Administration will announce next year's COLA in October. The COLA is based on the consumer price index for Urban Wage Earners and Clerical Workers (CPI-W) data for September, August, and July. Related Stories 5/13/2025 5/13/2025 A The senior citizens group said that while the COLA for next year may not have a substantial impact, it noted that President Donald Trump issued an executive order designed to lower prescription drug prices. 'President Trump's executive order is a big step for Medicare's ability to negotiate prices. American taxpayers should not be paying more than the price charged in other countries for the same drugs, especially those made by American companies. American taxpayers shouldn't have to subsidize the rest of the world's healthcare while our own seniors are struggling to get by,' Benton said. The Social Security Administration in October 2024
Yahoo
12-04-2025
- Business
- Yahoo
How Trump's tariffs could impact the Social Security 2026 COLA estimate
Tariffs aren't just clouding the outlook for markets, but also Social Security recipients and what they can expect for their cost-of-living adjustment next year. Based on Thursday's slower-than-expected annual March inflation report, the estimated Social Security COLA for 2026 is 2.2%, according to Mary Johnson, retired Social Security policy analyst who continues to track the data. In March, prices decreased in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), the index used to calculate the annual adjustment to Social Security benefits, to 2.2%. Overall inflation rose 2.4%, down from February's 2.8% rise. That was the lowest annual increase since September and below economists' average forecast for 2.6% but still above the Federal Reserve's 2% goal. But with President Donald Trump's tariff plan remaining uncertain for the rest of this year, the COLA estimate could still change a lot, she said. Trump paused most of his aggressive reciprocal tariffs but raised his tariff on China to 145% to punish the Asian nation for its retaliatory tariff. "A trade war with China or higher tariffs with other trading partners, would cause higher inflation," Johnson said. "That could push COLAs higher as well." A higher COLA wouldn't hurt seniors, but the reality is that even steeper adjustments haven't helped seniors pull out of the red. Items seniors spend most of their money on continue to outpace the inflation rate that COLA calculations are based on. For example, medical care services and food each rose 3% year over year in March, electricity gained 2.8% and hospital and related services were up 3.9%. Recent sharp stock market declines also haven't helped, Johnson said. "Higher sticky consumer prices, home repairs, changes in health are forcing older consumers to spend more from savings at a faster rate, at the same time extreme stock market volatility pummels the value of retirement account holdings," she said. Many seniors support Trump's promise to end taxes on Social Security. It "is ridiculous!" said David Alston, 65, of Woodbridge, New Jersey, in an email. "You pay taxes for 'years' while you're working. Then after you file to get your benefits, the government taxes them again?! This is 'double taxation' and that's unconstitutional!" Though almost everyone would welcome fewer taxes, Johnson warns "be careful what you wish for." While popular with older Americans, the proposal holds pitfalls that could reduce the amount of money that Social Security and Medicare needs to fund the benefits of today's retirees, she said. 'Alternate streams of revenue would be required for both programs or benefit cuts and substantially higher healthcare costs could follow, that far outweigh the tax benefit,' Johnson said. Taxation of Social Security benefits for 2025 is expected to supply about 4% of the income needed to fund the benefits of today's retirees and to cover 10% of the income needed for Medicare costs according to the most recent Social Security and Medicare Trustees reports. Medora Lee is a money, markets, and personal finance reporter at USA TODAY. You can reach her at mjlee@ and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday. This article originally appeared on USA TODAY: Trump tariffs could have impact on Social Security 2026 COLA estimate
