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Social Security recipients could see the smallest COLA increase since 2021. Here’s what to expect.
Each year, the Social Security Administration adjusts its benefits to account for inflation, providing an annual cost-of-living increase that’s meant to offset rising prices. This year, the program’s 67 million recipients may see their smallest boost since 2021.
The 2025 cost-of-living adjustment is projected to come in around 2.63%, the Senior Citizens League, an advocacy group for older Americans, said on Thursday. That figure is based on recent inflation data, with consumer prices in June rising 3%, the smallest increase since June 2023 and less than the 3.1% economists were forecasting.
If enacted, a 2.63% increase would represent a monthly payment increase of about $50, based on the current average monthly benefit of $1,907.
To be sure, official word on this year’s cost-of-living adjustment, or COLA, won’t come until October, when the Social Security Administration traditionally sets the next year’s benefit hike for beneficiaries. The first payment with the new COLA will show up in most recipients’ January benefit check.
While U.S. inflation is easing, many seniors aren’t feeling relief, the Senior Citizens League noted. Poverty among senior citizens has been on the rise in recent years, and almost half of people over 65 years old said they were having difficulty in paying their household bills, according to the most recent Census Household Pulse, which surveyed people from May 28 to June 24.
“Rising grocery prices is creating food insecurity for many retirees,” the Senior Citizens League said in its statement. “Feeding America estimated that 5.5 million Americans age 60 and above suffered from food insecurity in 2021, in the most recent study available on the subject, and that number is likely higher today.”
How Social Security sets its COLA
The Social Security Administration sets its annual COLA based on inflation during the third quarter, or from July through September. The agency takes the average inflation rate over that period from what’s known as the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W, which tracks spending by working Americans.
If that inflation rate is higher than the same period a year earlier, the COLA is adjusted upwards by the difference.
But some advocacy groups and lawmakers have criticized the use of the CPI-W, given that older Americans spend differently than younger workers. For instance, the Senior Citizens League has noted that the CPI-W assumes workers spend about 7% of their income on health care, but older Americans can spend up to 16% or more on health costs.
Tupperware and some of its subsidiaries filed for Chapter 11 bankruptcy protection, the once-iconic food container maker said in a statement late Tuesday.
The company has suffered from dwindling sales following a surprise surge during the COVID-19 pandemic, when legions of people stuck at home tried their hands at cooking, which increased demand for Tupperware’s colorful plastic containers with flexible airtight seals.
A post-pandemic rise in costs of raw materials and shipping, along with higher wages, also hurt Tupperware’s bottom line.
Last year, it warned of “substantial doubt” about its ability to keep operating in light of its poor financial position.
“Over the last several years, the Company’s financial position has been severely impacted by the challenging macroeconomic environment,” president and CEO Laurie Ann Goldman said in a statement announcing the bankruptcy filing.
“As a result, we explored numerous strategic options and determined this is the best path forward,” Goldman said.
The company said it would seek court approval for a sale process for the business to protect its brand and “further advance Tupperware’s transformation into a digital-first, technology-led company.”
The Orlando, Florida-based firm said it would also seek approval to continue operating during the bankruptcy proceedings and would continue to pay its employees and suppliers.
“We plan to continue serving our valued customers with the high-quality products they love and trust throughout this process,” Goldman said.
The firm’s shares were trading at $0.5099 Monday, well down from $2.55 in December last year.
Tupperware said it had implemented a strategic plan to modernize its operations and drive efficiencies to ignite growth following the appointment of a new management team last year.
“The Company has made significant progress and intends to continue this important transformation work.”
In its filing with the U.S. Bankruptcy Court for the District of Delaware, Tupperware listed assets of between $500 million and $1 billion and liabilities of between $1 billion and $10 billion.
The filing also said it had between 50,000 and 100,000 creditors.
Tupperware lost popularity with consumers in recent years and an initiative to gain distribution through big-box chain Target failed to reverse its fortunes.
The company’s roots date to 1946, when chemist Earl Tupper “had a spark of inspiration while creating molds at a plastics factory shortly after the Great Depression,” according to Tupperware’s website.
“If he could design an airtight seal for plastic storage containers, like those on a paint can, he could help war-weary families save money on costly food waste.”
Over time, Tupper’s containers became popular that many people referred to any plastic food container as Tupperware. And people even threw “Tupperware parties” in their homes to sell the containers to friends and neighbors.
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