In recent years, Social Security beneficiaries have seen large cost-of-living adjustments (COLAs), which helped keep up with rising prices. However, in 2025, the COLA is only 2.5%.
This increase, though still positive, may not be enough to keep pace with inflation, which has risen 2.9% annually as of December.
As inflation continues to grow, Social Security recipients could see a decrease in their purchasing power, which means that 2.5% COLA might not stretch far enough.
If you’re finding it tough to cover your expenses with the 2.5% increase, it’s time to think about some changes that could help make your money last longer.
1. Rethink Your Budget
If you’re retired, it’s natural to want to spend on things beyond necessities. But with a COLA that doesn’t fully meet inflation, it may be time to cut back.
Go through your monthly spending and identify non-essential expenses that could be reduced.
You might want to cancel unused subscriptions, stop eating out so often, or cut back on luxury purchases. Being mindful of where your money goes can free up extra cash for more important needs.
2. Downsize Your Home
If you’re living in a larger home, downsizing could lower your living costs significantly. Even if your mortgage is paid off, you’re still paying for property taxes, insurance, maintenance, and utilities.
By moving into a smaller home, you could save money on all these fronts. If you own your current home outright, you may even be able to sell it and buy a smaller place with cash, leaving you with extra money to use for living expenses.
This extra cash could provide more flexibility to manage your budget and Social Security income.
3. Relocate to a Cheaper Area
Social Security payments remain the same regardless of where you live. If you’re currently residing in a high-cost area, it might be time to consider relocating to a more affordable region.
Moving to a place with lower costs for housing, food, and other essentials could stretch your Social Security benefits further.
However, moving can be a big decision, especially if it means being far from family or a community you’ve grown accustomed to. Weighing the financial benefits against the emotional impact of moving is crucial before making any decisions.
4. Look for Part-Time Work
If you’re struggling with the cost of living, returning to work doesn’t necessarily mean un-retiring.
Many seniors choose part-time work to supplement their Social Security income. You can explore opportunities in the gig economy, such as selling baked goods at local markets, offering pet-sitting services, or driving for a rideshare company.
Alternatively, if you have experience in your previous career, you could pick up part-time work as a consultant or even substitute teaching.
Taking on part-time work can help you make ends meet and give you more financial freedom.
Even if your Social Security COLA isn’t enough, part-time income can make a significant difference in your budget.
Final Thoughts
The 2.5% increase in Social Security benefits may not be enough to keep up with rising costs, but there are ways to adjust your lifestyle to make the most of your income.
From cutting back on unnecessary spending to downsizing your home, there are practical steps you can take to manage your finances effectively.
Whether you decide to relocate or take on part-time work, making these adjustments now can help you avoid financial stress down the road.
Disclaimer- Our team has thoroughly fact-checked this article to ensure its accuracy and maintain its credibility. We are committed to providing honest and reliable content for our readers.
Archer Bannister is a journalist with 4 years of experience covering hard-hitting stories. Currently working with Mikeandjonpodcast, Archer specializes in delivering timely and in-depth updates on a variety of topics, including crime news, politics, and national issues affecting the USA. His expertise and dedication to delivering accurate, impactful news make him a trusted voice for audiences seeking to stay informed on critical topics.
