Finance

Social Security benefits have lost 20% of buying power since 2010. The problem could soon get worse

Published

10 months ago

July 31, 2024

Ramsey Solutions personality Jade Warshaw breaks down how to get the most out of your Social Security check and more on ‘The Bottom Line.’

High inflation is continuing to wreak havoc on older Americans’ finances.

New research published by the Senior Citizens League, a nonpartisan group that focuses on issues relating to older Americans, estimated that Social Security benefits have lost 20% of their buying power since 2010. On average, payments for retired workers would need to rise by $4,440 per year, or $370 per month, to compensate for that lost value.

“The study confirms that prices older consumers are paying have outstripped cost-of-living adjustments (COLAs), leaving many on the edge of financial distress,” the report said.

Between 2010 and 2024, benefits have risen by about 58%, thanks to the annual COLA. Yet the cost of most goods and services purchased by the typical retiree rose 73% during that same time period.

THE ‘MAGIC NUMBER’ TO RETIRE COMFORTABLY HITS NEW ALL-TIME HIGH

A Social Security card sits alongside checks from the U.S. Treasury in Washington, D.C., on Oct. 14, 2021. (Kevin Dietsch/Getty Images / Getty Images)

The problem may soon get worse.

Recipients are on track to receive a 2.63% COLA in 2025, which is below the current 3% pace of inflation. It would mark the lowest annual COLA since 2021. The Social Security Administration will release the final adjustment percentage in mid-October.

In the 1990s and early 2000s, about 60% of the cost-of-living increases beat the inflation rate, while in the 2010s, only 40% did. Through the 2020s so far, just one cost-of-living increase — a record 8.7% bump in 2023 — has done so.

“The reality is that COLAs have become less and less likely to match inflation over time,” the report said.

AMERICANS ARE WORRIED ABOUT OUTLIVING THEIR RETIREMENT SAVINGS

Social Security recipients are on track to receive a 2.63% cost-of-living adjustment in 2025, which is below the current 3% pace of inflation. (iStock / iStock)

Consumers are grappling with a number of financial headwinds, including steep interest rates and ongoing inflation that has made the cost of just about everything from rent to gasoline to groceries more expensive. The burden is disproportionately borne by low-income Americans, whose already stretched paychecks are heavily affected by price fluctuations.

While inflation has fallen considerably from a peak of 9.1% notched during June 2022, it remains above the Federal Reserve’s 2% goal. And when compared with January 2021, before the inflation crisis began, prices are up nearly 20%.

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The uncertain economic landscape has many Americans reconsidering whether retirement is a realistic goal.

More than one-quarter of all non-retired investors said they would likely be forced to return to the workforce at some point due to inadequate savings if they were to retire within the next 12 months, and 19% doubt they will ever save up enough money to retire, according to separate survey data from Nationwide.

“Americans believe they will need over $1 million to retire comfortably, a figure that could be discouraging for even the most committed retirement savers,” said Rona Guymon, senior vice president of Nationwide annuity distribution.

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Finance

Walmart taps own fintech firm for credit cards after Capital One exit

Published

2 hours ago

June 9, 2025

Business Finance News

A Capital One Walmart credit card sign is seen at a store in Mountain View, California, United States on Tuesday, November 19, 2019.

Yichuan Cao | Nurphoto | Getty Images

Walmart‘s majority-owned fintech startup OnePay said Monday it was launching a pair of new credit cards for customers of the world’s biggest retailer.

OnePay is partnering with Synchrony, a major behind-the-scenes player in retail cards, which will issue the cards and handle underwriting decisions starting in the fall, the companies said.

OnePay, which was created by Walmart in 2021 with venture firm Ribbit Capital, will handle the customer experience for the card program through its mobile app.

Walmart had leaned on Capital One as the exclusive provider of its credit cards since 2018, but sued the bank in 2023 so that it could exit the relationship years ahead of schedule. At the time, Capital One accused Walmart of seeking to end its partnership so that it could move transactions to OnePay.

The Walmart card program had 10 million customers and roughly $8.5 billion in loans outstanding last year, when the partnership with Capital One ended, according to Fitch Ratings.

For Walmart and its fintech firm, the arrangement shows that, in seeking to quickly scale up in financial services, OnePay is opting to partner with established players rather than going it alone.

In March, OnePay announced that it was tapping Swedish fintech firm Klarna to handle buy now, pay later loans at the retailer, even after testing its own installment loan program.

One-stop shop

In its quest to become a one-stop shop for Americans underserved by traditional banks, OnePay has methodically built out its offerings, which now include debit cards, high-yield savings accounts and a digital wallet with peer-to-peer payments.

OnePay is rolling out two options: a general-purpose credit card that can be used anywhere Mastercard is accepted and a store card that will only allow Walmart purchases.

Customers whose credit profiles don’t allow them to qualify for the general-purpose card will be offered the store card, according to a person with knowledge of the program.

OnePay didn’t yet disclose the rewards expected with the cards, though the general-purpose card is expected to provide a stronger value, said this person, who declined to be identified speaking ahead of the product’s release. The Synchrony partnership was reported earlier by Bloomberg.

“Our goal with this credit card program is to deliver an experience for consumers that’s transparent, rewarding, and easy to use,” OnePay CEO Omer Ismail said in the Monday release.

“We’re excited to be partnering with Synchrony to launch a program at Walmart that checks each of those boxes and will help serve millions of people,” Ismail said.