USPS seeks stamp price hike, suspends retirement contributions amid financial strain

The U.S. Postal Service is proposing a postage rate increase while taking steps to cut costs, including temporarily suspending certain retirement contributions, as it works to stabilize its finances.

The agency announced it is seeking approval to raise the price of a First-Class Mail Forever stamp by 4 cents, from 78 cents to 82 cents. If approved, the increase would take effect July 12.

At the same time, USPS has suspended its employer contributions to a federal pension program, a move officials say is aimed at preserving cash as the agency faces a significant financial shortfall.

Postal officials say the pension payment pause, which began in April, could save the agency about $2.5 billion through the end of the fiscal year. The Postal Service typically contributes about $200 million every two weeks to the retirement system.

Despite the suspension, USPS leaders say there will be no immediate impact on current retirees or employees’ earned benefits. The agency will continue making other required payments, including Social Security contributions.

The changes come as USPS warns of a worsening financial outlook. The agency has reported tens of billions of dollars in losses over the past two decades, driven largely by declining first-class mail volume and rising operational costs.

Postal officials have cautioned that without additional reforms or revenue increases, the agency could face a liquidity crisis within the next year.

The proposed stamp increase is part of a broader strategy to boost revenue while maintaining service. Regulators must approve the rate change before it can take effect.