The 2.5% adjustment for next year amounts to just $49 more for the average retiree. Meanwhile, prices for basic goods like food and medicine continue to rise. If you rely on that retirement, you know that 49 pesos is insufficient to cover the supermarket price increase. Without a doubt, this was a hard blow.
But hold on, there is a ray of hope on the horizon: the COLA for 2026. Although the official figure is still a long way off, some experts believe it could be higher than expected. That sounds good, right? We’ll see why things aren’t so easy for retirees.
The Social Security COLA and the inflation that haunts us
The government uses the CPI-W index to measure inflation among urban workers. They compare the data from July, August, and September of this year to that of the previous year, and bang!, the percentage increase appears. By 2025, the difference was 2.5%, but here’s the catch: that index excludes retirees. Yes, as you heard it.
The Senior Citizens League (TSCL) aims to predict the COLA ahead of time. In January, they predicted 2.1% for 2026, but in February, they increased the projection to 2.3%.
In silver, the average monthly check would increase from $1,979 to $2,025. Of course, their calculations have been nearly prophetic (they missed by only 0.1% in 2025). Reliable? It appears so.
Here is the issue that concerns us: if the COLA rises, it will be because inflation is already eating us alive. In other words, the “extra” increase is merely an attempt to compensate for what you have already lost. Imagine running on a treadmill: you move, but you don’t advance.
Since 2010, profits have lost 20 percent of their purchasing power. 20%! It doesn’t matter if the check is larger if everything is twice as expensive.
Your retirement calculation could be wrong, some say
Another issue to consider is that the CPI-W does not account for the expenses that retirees incur that younger or working-age people do not. For example, older people tend to invest more in health rather than in technology.
If they had used the CPI-E (an index created for them), the COLA would have been higher in seven of the last ten years. Why aren’t they changing the formula? Good question, but the SSA insists on adhering to the CPI-W.
Some politicians have suggested using the CPI-E, but no one has taken action. The issue is linked to Social Security’s financing crisis, for which the agency owes $23 billion. It is unlikely that they will improve the formula until they resolve that mess. In the meantime, we must hold on and hope that October 2025 brings less disappointing news.
How to increase your Social Security retirement check
To receive the maximum Social Security check in 2025 ($5,108 per month), you must meet the three key requirements outlined below:
Work for 35 years and earn the maximum taxable amount: Social Security calculates your benefit based on your 35 years of highest income. To be eligible for the maximum, you must earn $168,600 or more per year (taxable limit 2024, adjusted annually) for at least 35 years. If you work fewer years or earn less, the amount decreases.
Delay retirement until age 70:
The “normal” retirement age is 67 (for those born in 1960 or later), but if you wait until 70, you will accumulate late credits worth an additional 8% per year! For example, if your base benefit is $3,800 at age 67, but you wait until age 70, the payment will increase to around $4,700.
Again, don’t retire early:
If you request your check before the age of 70 (even 67), you will lose those credits. And if you retire before the age of 67, the reduction is even greater: you can save up to 30% if you retire at 62. Patience is worth $$$. The more years you have spent close to the taxable limit, the higher your average will be. However, to reach $5,108, you must maximize your income for decades.
Also See:- The Social Security Payment You Don’t Expect but Arrives in Hours
