Despite the fact that retirement pensions have increased for 2025 in the United States, the beneficiaries of these benefits consider that “it is not enough” due, to a large extent, to the fact that inflation rose shortly after Social Security took this measure. Therefore, the purchasing power of these pensioners is hardly benefited, since the increase in prices is more notable than the rise in pensions from the Public Administration. Although, of course, “every little bit helps,” according to Jenn Jones, vice president of financial security at AARP, an advocacy group representing Americans aged 50 and over.
Thus, American society must assess whether this new measure by the institutions is compatible with their pace of life, according to price indexes and the rising cost of basic products in the shopping basket. According to the organizations in charge of managing this matter, pensions will have experienced an increase of $50 per month to retirement benefits, an amount that marks the lowest increase since 2021, when inflation skyrocketed shortly after.
Do pensions allow for a good standard of living?
The data do not lie. A measure developed by the Index of Economic Security Standard for Older Adults, carried out by the Institute of Gerontology at the University of Massachusetts in Boston, assesses how much it costs older adults to pay for their basic needs and to grow old at home. Therefore, on average, a single person would need $2,099 per month if they owned a home without a mortgage to cover household expenses, food, transportation, medical care and other expenses, according to data from the 2024 Senior Index.
However, this figure rises to $2,566 per month for single renters, and $3,249 per month for single homeowners with a mortgage. Also, according to the index, an older couple who own a home without a mortgage would need $3,162 per month, while for a couple who rent their home that figure rises to $3,629 per month. Finally, the study concludes that for a couple with a mortgage on their home, it is $4,312 per month.
In this sense, these are amounts that exceed the average retirement benefits that Social Security can offer. Therefore, in 2025, individual retired workers will receive an average of $1,976 per month, while couples who are eligible for benefits will receive an average of $3,089 per month. Therefore, according to Jan Mutchler, professor of gerontology at the University of Massachusetts in Boston, regarding the comparisons that were made before the 2024 data, what emerges is that “there is not a single county in the country where the average Social Security benefit covers an adequate lifestyle”.
Accelerated price increases
The economic adjustments that are being announced in terms of retirement have the demanding condition of keeping up with the social pace demanded by the present day, with the aim of favoring the purchasing power of pensioners and pension beneficiaries. However, this adjustment is made annually, so they suffer a “lag”, Laura Quinby, associate director of employee benefits and labor markets at the Retirement Research Center at Boston College.
Therefore, according to the institutions’ data, as inflation rates skyrocketed and peaked in 2022, Social Security cost-of-living adjustments also reached four-decade highs. In 2022, Social Security beneficiaries saw a 5.9% increase in their benefits, followed by a larger increase of 8.7% in 2023. That increase, in turn, slowed to 3.2% in 2024, followed by a more modest increase of 2.5% in 2025. Therefore, as experts in this field predict, prices may increase faster than the queues at Social Security offices.
