Americans agree that something must be done to save Social Security: survey
Social Security cost of living adjustment for 2024 is projected at 2.57%
Most Americans had no idea that their Social Security benefits could be cut in the next decade, according to a recent survey. (iStock / iStock)
Only Americans unaware of looming changes to Social Security aren't bothered by them, a recent survey said.
Only 30% of respondents knew that without reforms, Social Security beneficiaries would face an automatic cut in benefits in the next decade, amounting to nearly $17,000 per year for the average couple, according to the Peter G. Peterson Foundation survey. These Americans support changes to protect benefits.
However, once respondents who were unaware of the changes ahead understood the bottom-line impact, 97% agreed it is important for the leaders elected this fall to strengthen Social Security so it is fully available for current and future generations.
"These results demonstrate that, while there is more work to do to educate Americans about Social Security's unstable finances, there is overwhelming support for courageous leaders to take action once the current reality is understood," Michael Peterson, CEO of the nonpartisan Peterson Foundation said. "Voters understand that 'not touching' Social Security is not an option because automatic cuts are unacceptable and waiting only makes the problem more costly and difficult to solve."
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Social Security gains extra year of solvency
Social Security benefits are still projected to start running out. Still, a recent report released by the Treasury said benefits may not need to be cut until 2035, one year later than previously forecast.
Trustees said that the Social Security trust funds will begin to run out of money by 2035 and senior citizens can expect their benefits to be reduced by 17% unless Congress takes steps to shore up the program. Increased wage growth and low unemployment are why the trust funds gained another year of solvency.
"More people are contributing to Social Security, thanks to strong economic policies that have yielded impressive wage growth, historic job creation, and a steady, low unemployment rate. So long as Americans across our country continue to work, Social Security can — and will — continue to pay benefits," Social Security Commissioner Martin O'Malley said. "Congress can and should take action to extend the financial health of the Trust Fund into the foreseeable future, just as it did in the past on a bipartisan basis.
"Eliminating the shortfall will bring peace of mind to Social Security's 70 million-plus beneficiaries, the 180 million workers and their families who contribute to Social Security, and the entire nation," O'Malley continued.
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AMERICANS ADJUST RETIREMENT GOALS UP 15% BUT SAVINGS DROP: SURVEY
COLA not keeping up with inflation, advocacy group says
The Senior Citizens League's (TSCL) latest projections point to a 2.57% Social Security cost of living adjustment (COLA) in 2025, a drop from the 2.66% forecast the month before. Social Security recipients received a 3.2% increase in 2024, significantly lower than 8.7% the year before.
The 3.2% Social Security cost-of-living adjustment (COLA) is well above the 2.6% average over the past two decades. However, according to the TSCL, 69% of retirees said that their household costs rose faster than the COLA last year, with costs for food and housing taking the lead.
"The fact is that COLAs have become less and less likely to keep up with inflation over time," TSCL said. "Just one of the five COLAs implemented so far in the 2020s (20%) has outpaced inflation, compared to 40% in the 2010s and 60% in the 2000s and 1990s. What's worse, when COLAs fall short, it can leave seniors thousands of dollars behind what they expected from Social Security. This is mainly because a COLA shortfall has a long-lasting, cumulative effect."
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