The latest estimate of Social Security’s cost-of-living adjustment (COLA) for 2025 slipped to 2.7% after the government said inflation cooled more than expected in June, new calculations showed Thursday.
In June, the 2025 COLA forecast was 3%.
The consumer price index (CPI), a broad measure of goods and services costs, rose 3% in June from a year earlier, the government said on Thursday. That’s down from 3.3% in May and below the 3.1% FactSet consensus forecast from economists. The so-called core rate, which strips out volatile food and energy prices, rose 3.3%, the lowest level since April 2021 and down from 3.4% in May. That was also below predictions for 3.4%.
COLA is based on the “consumer price index for urban wage earners and clerical workers,” or CPI-W. That figure fell to 2.9% from May’s 3.2% and, is finally below the 3.2% COLA Social Security recipients began receiving in January.
The decline in the estimated 2025 COLA adjustment is likely to be bad news for seniors who continue to grapple with the cumulative effect of high inflation over the past few years and high prices for daily essentials, said Mary Johnson, a retired analyst for the nonprofit Senior Citizens League who tracks and calculates the COLA estimates.
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