Nearly one-third of Social Security beneficiaries are cutting back on their basic expenses because of rising costs

According to a new report, rising costs are cutting back on necessities for Social Security recipients.

According to a nationwide survey of retired Social Security recipients, more than half are cutting back on discretionary spending. Cutting pennies and cutting frivolous spending as costs rise across the board is not unusual. However, more than a third of retirees reported that they had to cut spending further, reducing spending on essentials, such as medical costs and groceries.

Each year, the Social Security Administration adjusts benefits to match inflation. The projected cost of living adjustment (COLA) for 2026 is 2.7%. However, that may not be enough for many older Americans to live on, because COLAs are not predictive, but instead rely on past data.

Interest does not keep pace with inflation

More than 60% of retired Social Security beneficiaries believe higher tariffs will push inflation beyond what COLAs can cover, according to Nationwide.

“It is safe to assume that many retirees will continue to struggle to cover basic living costs, as inflation for these expenses will exceed the expected 2.7% increase in Social Security’s COLA,” said Imelda Padilla Frosto, a research scientist at the Center for Health Policy Research at the University of California, California.

Between 2010 and 2024, COLAs increased beneficiaries’ Social Security benefits by 58%, while inflation increased seniors’ expenses by 73% in the same time frame, according to research by the Senior Citizens Association.

As a result, millions of retirees are left trying to decide where to save and where to spend their dollars.

“A lower COLA, such as the 2.7% expected for 2026, would mean… [retirees] “They are losing purchasing power and will need to cut back on expenses, draw more from their savings (if they have savings), or seek help with basic living expenses,” Padilla-Frosto said.

How to budget if your Social Security benefits are insufficient

Padilla-Frausto recommends that retirees use resources like the Aging Index to gauge how much income they need to cover basic costs like housing, food, health care, and transportation as they plan where to make cuts.

Certified financial planner Jason Fannon also believes that reviewing monthly expenses — especially discretionary expenses — is the first step to reducing financial stress caused by inflation.

“We can’t control increases in Medicare premiums or grocery prices, so we have to make sure we remain flexible in our finances,” Fannon said.

For those looking to relieve some of the inflationary pressures without cutting back on necessities, Fanon suggests considering two options:

• Divide essential bulk household purchases, such as toilet paper and cleaning supplies, with others.
• Find ways to reduce monthly expenses that you can’t cut completely, such as looking at lowering your premiums or health insurance costs.
• Get a part-time job if you’re able to.
• Invest in large-cap common stocks.

“Think of ways to cut back on spending wont “It affects your health,” Fanon said.