In order to ensure that benefits keep up with inflation, the Social Security Administration (SSA) typically makes a cost of living adjustment (COLA) each year. For 2025, the SSA has delivered a 2.5% COLA — and the benefit increase appears to be getting mixed reviews from retirees.
In a survey of 2,000 retirees conducted by The Motley Fool, 54% of the respondents said that the new COLA for this year wasn’t enough. Breaking the results of the survey down a bit further, 30% think that this year’s COLA is completely insufficient, and 24% think that it’s somewhat insufficient.
Even if future COLAs come in higher than this year’s level, stretching your Social Security benefits to cover costs in retirement can be difficult. The good news is that there are steps you can take to minimize your reliance on Social Security and set yourself up for wealth in your golden years.
While it may sound like an obvious or simple step to improving your finances, having a workable budget and sticking to it is a foundation-level way to ensure you’re positioned for a comfortable retirement. Even basic expenses can add up quickly, and a lack of oversight when it comes to discretionary spending can mean that you wind up holding on to less of your take home pay than you had anticipated.
Having a sound understanding of your personal finances and living within those parameters will help ensure that you are on the right path toward a comfortable retirement. And while inflation for housing, food, and other essentials can make saving more difficult, taking control of your financial future through budgeting can limit your exposure to pricing creep in other categories.
In addition to having a well-defined budget, it’s a good idea to assess how well you’re sticking to your plan and how much money you’re actually managing to save at regular intervals. It can also help you avoid lifestyle inflation, which is a tendency that sees people increase their spending as their earnings rise. If you’re earning more money but wind up spending beyond the extra cash you’re bringing in, you could be sabotaging your plans for a wealthy retirement.
Once you’ve outlined your personal budget and made adjustments as needed, you should have a good idea how much extra cash you’re bringing in each month. If you don’t already have an emergency fund, you should make sure you have money set aside for one. When that important financial base is covered, you can start formulating your investment strategies.
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