The cost-of-living adjustment estimate for older adults next year continues to shrink as inflation cools further, according to new calculations.
Based on August’s consumer price index report on Wednesday, Social Security’s cost-of-living-adjustment (COLA) in 2025 is forecast at 2.5%, lower than last month’s 2.6% estimate and below the 2024 increase of 3.2%, said Mary Johnson, an independent Social Security and Medicare policy analyst who tracks and calculates the COLA estimates. A 2.5% COLA would raise an average retiree benefit of $1,870 per month by about $46.80 (rounded to the nearest dime).
The increase will likely be insufficient to help retirees dig out of a financial hole as prices of goods and services that retirees spend most of their money on remain high, Johnson said.
“The 2025 COLA will be the lowest received by Social Security beneficiaries since 2021, at the same time inflated prices persist on key essentials such as housing, meats, auto insurance, any type of service and repairs,” she said.
The Census Bureau also reported on Tuesday that a larger percentage of seniors has been falling into poverty every year since 2020.
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Annual COLAs are meant to help Social Security beneficiaries keep up with inflation, but they haven’t been, a study by The Senior Citizens League (TSCL) released in July showed.
Social Security benefits have lost 20% of their purchasing power since 2010…
