The Senior Scene

The financial demands of eldercare are straining the budgets of many military families, with new data highlighting the growing burden as service members take on caregiving responsibilities for aging relatives.

A survey conducted by First Command Financial Services Inc. found that 63 percent of middle-class military households—defined as commissioned officers and senior noncommissioned officers (E-5 and above) earning at least $50,000 annually—are now providing care for elderly family members. That’s a significant jump from 13 percent in 2012, when the company first began tracking eldercare trends as part of its First Command Financial Behaviors Index, which assesses trends among financial behaviors through a monthly survey of approximately 530 U.S. consumers 25 to 70 years old with annual household incomes of $50,000 or more.

Eldercare costs are presenting a significant challenge for many, with 58 percent of the survey respondents reporting higher-than-expected expenses, and 53 percent calling the costs a severe financial concern.

The average caregiving family spends $1,647 per month, with expenditures directed toward home care, nursing homes, and other healthcare services.

According to First Command’s researchers, military families are taking on these responsibilities at higher rates than their civilian counterparts. Among the general population, 23 percent report caring for an elderly relative, with average monthly costs slightly higher at $1,839. Civilian caregivers similarly report financial strain, with 56 percent citing unexpected costs and 34 percent identifying eldercare as a severe concern.

Looking ahead, 31 percent of military families and 21 percent of general-population households anticipate providing eldercare to a parent or other elderly relative in the future, such as a grandparent, aunt, or uncle.

Mark Steffe, First Command’s president, stressed the importance of financial planning to navigate the economic challenges of eldercare.

“Nine out of 10 military families who are caring for an elderly family member said they planned in advance for the costs,” Steffe said. “One out of four sought help from a financial advisor. Working with a knowledgeable financial coach is a prudent way for military families to prepare for and deal with the economic realities of eldercare while continuing to pursue their own financial goals.”

As Congress struggles to ensure Social Security is fully funded far into the future, it will have a new problem to deal with. If President Trump carries out his vow to deport all illegal immigrants in the U.S., Social Security will face a more significant deficit.

Studies by think tanks and the Congressional Budget Office have shown the Social Security Administration (SSA) receives billions each year from an unexpected source: Legal and illegal immigrants. Some economists project a broad drag on the economy as a result of Trump’s actions — and it could cost Social Security roughly $20 billion in cash flow annually, according to actuaries at the SSA, which sends benefits to 68 million Americans each month, totaling $1.5 trillion last year alone.

Foreign-born workers in the United States contribute to Social Security at the same tax rate as everyone else but have lower predicted Social Security benefits than native-born Americans because, on average, they earn lower lifetime wages and have fewer years of employment that count toward their calculated benefits.

In addition, recent trends suggest that foreign-born workers are increasingly returning to their home countries to retire. As a result, many who pay into the Social Security system during their working years may not be eligible to receive benefits because non-residents can only do so under certain circumstances. Foreign-born contributors can generate net gains for the Social Security trust fund by not fully drawing benefits. 

As far as illegal immigrants are concerned, in 2022, they contributed $25.7 billion in Social Security taxes, typically by working under borrowed or fraudulent Social Security numbers. Unauthorized immigrants, however, are ineligible to claim Social Security benefits. Source: The Senior Citizens League, a non-profit advocacy organization supporting older adults’ benefits.

Military retirees and disabled veterans will receive 2.5 percent increases to their monthly paychecks for 2025, thanks to the annual cost of living adjustment (COLA) that’s tied to inflation.

While that may look low compared to recent years’ adjustments of 3.2 percent in 2024, 8.7 percent in 2023, and 5.9 percent in 2022, it’s still close to the average of about 2.6 percent for the past decade.

The U.S. Department of Labor determines the annual COLA by measuring the Consumer Price Index, or CPI, a measurement of a broad sampling of the cost of consumer goods and expenses. The CPI is compared to the previous year; if there is an increase, there is a COLA. If there is no increase, there is no COLA, and benefits remain the same — they don’t decrease. For 2025, retired military members will receive a $25 increase for each $1,000 of military retirement pension they receive each month.

Retirees who entered military service on or after Aug. 1, 1986, and opted for the Career Status Bonus (CSB/Redux retirement plan) will have any COLA increases reduced by a percentage point, so they will receive a smaller increase of $15 per $1,000 in 2025. Recipients of Survivor Benefit Plan payments will receive increases to their payments by the same amount as retirees.

Service members who retired in 2024 will receive a slightly reduced COLA in 2025. Their COLA is prorated based on which quarter they retired in (January-March, April-June, etc.). The prorated amount may also be adjusted based on when a member entered the service and which retirement plan they elected.

Disabled veterans will also receive increases to their benefit payments in the upcoming year. Department of Veterans Affairs (VA) disability checks will go up about $4.28 per month for those with a 10 percent rating and $93.45 for those rated at 100 perent who don’t have dependents.

Meanwhile, the VA has announced its 2025 Veterans Pension income limits. The new limits change veterans’ individual rates. The actual amount paid depends on a veteran’s income; the pension payment makes up the difference.

Veterans of wartime service who are 65 or older and on a limited income may qualify for a veteran’s pension without being disabled.

More information is available at military.com.

By Marguerite Ro

Medication doesn’t work if you can’t afford it, and too many Washingtonians continue to struggle to fill prescriptions because of their cost. But that’s about to change for some.

A new law goes into effect on Jan. 1, 2025 for people with a Medicare prescription drug plan, capping out-of-pocket Rx expenses at $2,000 per year. An estimated 42,000 Washington seniors will see these new savings, an average of $1,500 in 2025, and that number will steadily increase over time.
It’s a victory we all share. Thanks to the unwavering dedication of AARP members across the country who have worked hand in hand with AARP’s efforts, we succeeded in passing a prescription drug law in 2022. Your stories and your voices made a difference. We couldn’t have done it without you. 

Between 3 and 4 million Part D plan enrollees nationwide are estimated to benefit from the new out-of-pocket cap every year between 2025 and 2029, according to a report published by AARP.

A 2023 survey from AARP shows that 60 percent of older adults are very or somewhat concerned about being able to afford the prescriptions they or someone in their family need. Rising drug prices have left some older adults with no choice but to skip doses or go without needed medication altogether.
AARP fought tirelessly for the prescription drug law because we knew it would bring much-needed relief to Medicare enrollees trying to keep up with rising costs for everyday essentials like housing, groceries, and utilities. This law is a step toward easing that burden.

Limiting out-of-pocket expenses for medication is just one part of the 2022 law.  It also makes many important vaccines, such as shingles and pneumonia, free. It limits insulin costs to $35 a month for Medicare beneficiaries and gives Medicare the power to negotiate with manufacturers to lower prices for certain high-cost prescriptions. 

AARP’s work doesn’t end with the passing of this law. We will continue to ensure it is fully implemented and benefits older Americans for decades to come.

Marguerite Ro is AARP Washington’s director.