Boomers Get A Bigger Check While The Rest Of Us Pay The Price

The Social Security Administration announced its annual cost-of-living adjustment (COLA) on Wednesday. Nearly 72 million retirees will receive a 3.6 percent increase in benefits next year.

Commissioner Frank J. Bisignano said the increase, which averages out to an extra $75 in benefits per month, will give retirees and disabled workers “greater financial stability.” The annual COLA is calculated using the Consumer Price Index for Urban Wage Earners and Clerical Workers, which the Department of Labor’s Bureau of Labor Statistics (BLS) determines. (RELATED: It’s Harder For Zoomers To Afford These Five Mainstays Of Life That Boomers Could When They Were Their Age)

BLS data released Wednesday showed that the Consumer Price Index increased 3.7 percent annually, up from August’s 3.4 percent rate. A 9.1 percent surge in gasoline prices in September accounted for more than half of the month-over-month consumer price gains. Year-over-year, gas prices stood 34.2 percent higher, while fuel oil costs spiked by 74.2 percent.

Social Security is a pay-as-you-go system. Payroll taxes collected from today’s active workers are not saved or invested in an individual account for them. Rather, they are used immediately to pay current benefits to retirees and disabled workers. Taxes that are not immediately paid out in monthly benefits stay in federal trust funds, managed by the U.S. Treasury, and get invested in special-issue Treasury bonds.

As older generations receive more in benefits, inflation continues to eat away at wage gains for working Americans.

A chart shared by Navy Federal Credit Union chief economist Heather Long showed that wage growth in the U.S. has dropped to a five-year low. Long said that wage increases for typical workers have been entirely offset by inflation since April.

The financial pain is real: Wage growth fell to 3% (y/y) in September. That’s the lowest in 5 years. Wage growth: 3% Inflation: ~3.4% Inflation has eaten up all wage gains for the average worker since April. Many people are having to make hard choices about what to buy and what to skimp on right now. Yes, consumption is still strong (mainly due to wealthier Americans and people dipping into savings or credit cards), but a lot of people have to think hard about every dollar they spend. Notable: Wages only ticked up 0.1% in the month of September. That was the weakest monthly gain since December 2025.

Long also noted that while overall consumer spending remains “still strong,” this activity is largely driven by higher-income households, credit card usage, and depleted savings, leaving most people to carefully evaluate every purchase.

A separate chart posted by Jack Salmon, a research fellow at the Mercatus Center at George Mason University, showed median household net worth by age beginning in 1989. Data from the Survey of Consumer Finances and the Federal Reserve found that older Americans over the age of 75 have seen their net worth steadily climb. But younger generations under 35 have largely stagnated.

If you solution to Social Security insolvency involves raising taxes on the blue line to give more benefits to the orange line, you should at least acknowledge the profound intergenerational injustice involved. https://t.co/BoebdMK5TX

Since the COVID-19 pandemic, the economic divide between wealthy Americans and the rest of the country has expanded, according to a Federal Reserve report released earlier in October.

The Fed’s 2025 Survey of Consumer Finances found that overall median family net worth ticked up 2 percent to nearly $216,000 between 2022 and 2025. However, stark generational disparities emerged over the same period: the median net worth for individuals under 35 plunged 23 percent to approximately $33,000, whereas for those aged 75 and older, it jumped 37 percent to roughly $504,900.