Despite the fact that retirement pensions in the United States have been increased for 2025, the recipients of these benefits believe that “it is not enough” due, in large part, to the fact that inflation rose shortly after Social Security implemented this measure.
As a result, the purchasing power of these pensioners is hardly impacted, as the increase in prices is greater than the increase in pensions from the Public Administration. Of course, “every little bit helps,” according to Jenn Jones, vice president of financial security at AARP, an advocacy group that represents Americans over the age of fifty.
Thus, American society must determine whether this new institutional measure is compatible with their pace of life, based on 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 seen a $50 monthly increase in retirement benefits, the smallest increase since 2021, when inflation skyrocketed shortly after.
Do pensions allow for a good standard of living?
The data does not lie. The Index of Economic Security Standard for Older Adults, developed by the Institute of Gerontology at the University of Massachusetts in Boston, measures how much it costs older adults to meet their basic needs and age at home.
According to data from the 2024 Senior Index, if a single person owned a home without a mortgage, they would require $2,099 per month to cover household expenses, food, transportation, medical care, and other expenses.
This figure increases to $2,566 per month for single renters and $3,249 per month for single homeowners with a mortgage.
According to the index, an older couple who owns a home without a mortgage would need $3,162 per month, whereas a couple who rents their home would require $3,629 per month. Finally, the study concludes that a couple with a mortgage on their home pays $4,312 per month.
In this sense, the amounts exceed the average retirement benefits that Social Security can provide. As a result, in 2025, individual retired workers will receive an average of $1,976 per month, while couples eligible for benefits will receive an average of $3,089.
According to Jan Mutchler, professor of gerontology at the University of Massachusetts in Boston, comparisons made prior to the 2024 data show 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 announced in terms of retirement have the demanding condition of keeping up with the social pace demanded by the present day, with the goal of increasing the purchasing power of pensioners and pension beneficiaries.
However, because this adjustment is made on an annual basis, there is a “lag,” according to Laura Quinby, associate director of employee benefits and labor markets at Boston College’s Retirement Research Center.
According to the institutions’ data, as inflation rates rose and peaked in 2022, Social Security cost-of-living adjustments reached four-decade highs. Social Security beneficiaries’ benefits increased by 5.9% in 2022, followed by an even larger increase of 8.7% in 2023.
That increase then slowed to 3.2% in 2024, with a more modest 2.5% increase in 2025. As a result, as experts in the field predict, prices may rise faster than the lines at Social Security offices.
