American retirees are receiving their first Social Security checks of 2025, with a modest 2.5% cost-of-living adjustment (COLA) that increases the average monthly benefit by about $50 to $1,976. However, many seniors still feel like they’re falling behind due to rising expenses on housing, healthcare, food, and transportation.
According to experts, living on Social Security alone can be challenging, with 37% of men and 42% of women aged 65 and older relying on the program for half or more of their income. The average retiree household spends nearly $1,787 per month on housing, leaving only about $189 for food, utilities, and other essential expenses.
Healthcare costs are another significant burden, with a 65-year-old retiree expected to spend an average of $165,000 on medical expenses throughout their retirement. Even affordable medications can be out of reach due to insurance limitations, forcing retirees to make difficult choices between paying for routine treatments or covering more pressing expenses.
The Consumer Price Index (CPI) used to calculate COLAs has been criticized for not accurately reflecting the spending patterns of retirees. As a result, many seniors feel that Social Security’s purchasing power is shrinking despite periodic raises. In 2023, retirees saw an 8.7% COLA, but by 2024, it had dropped to 3.2%, and now, in 2025, it has fallen again to 2.5%.
Experts warn that relying solely on Social Security for retirement can be a gamble, as many older Americans lack sufficient savings or pensions to fall back on. Building up savings through 401(k)s, individual retirement accounts (IRAs), and other investments is crucial to ensure a secure retirement.
With the average retiree’s monthly expenses far exceeding their Social Security benefit, it’s clear that retirees need more than just a raise from Social Security to make ends meet.
Source: https://finance.yahoo.com/news/millions-americans-received-first-social-114400233.html