2.6% Social Security COLA estimated for 2025

By Paul Liotta, Staten Island Advance, NY (TNS)

The Social Security Administration typically releases annual cost-of-living adjustments (COLA) in mid-October, but one organization says they will likely be lower in 2025 than in recent years.

The Senior Citizens League, a nonpartisan seniors group, released a 2025 COLA estimate of 2.6% on April 10.

If the estimate is correct, that number was lower than the previous two years, when Social Security COLA increased total benefits by 8.7% in 2023 and 3.2% this year.

The Senior Citizens League estimates and the final figure set by the federal government are based on inflation rates, which have been lower since the country’s economy stabilized following the global coronavirus (COVID-19) pandemic.

A rise in inflation marked an increase from The Senior Citizens League’s February COLA estimate of 1.75%, but Shannon Benton, executive director of The Senior Citizens League, said more needs to be done to help seniors of the country to help.

According to a survey the League conducted among seniors, 71% of respondents said they had seen an increase in household costs higher than last year’s 3.2% COLA.

“From declining long-term purchasing power to increased financial insecurity, the problem of seniors not being able to make ends meet remains a pressing concern of The Senior Citizens League,” Benton said.

About COLA adjustments

Social Security benefits and Supplemental Security Income (SSI) payments are subject to an annual COLA based on inflation rates to ensure monthly payments keep pace with rising costs.

In October 2023, the Social Security Administration (SSA) announced that beneficiaries will see a 3.2% increase for 2024, increasing the average monthly payment for Social Security benefits by more than $50 and the maximum SSI payment by $30.

The cost of living adjustments are determined based on data from the third quarter (July, August and September) of the Consumer Price Index for Urban Wage Earners and White-collar Workers (CPI-W).

Inflation for those three months is added together, averaged, and then compared to the average of the third quarter of the previous year, with the percentage difference between the current year and the previous year serving as the COLA rate for the coming year.

In recent years, the impact of the coronavirus (COVID-19) pandemic on inflation has led to abnormally high adjustments, including a 5.9% increase in 2022 and an 8.7% increase in 2023, the largest increase in four decades.

The decline in inflation in 2023 brought the 2024 adjustment back to 3.2%, which is more in line with the average annual increase of 2.6% over the past two decades.

In 2023, an average of nearly 67 million Americans received Social Security benefits per month, totaling more than $1.4 trillion in benefits paid during the year, according to the SSA.

Social Security benefits represent about 30% of the income of Americans 65 and older, the government said.

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