2025’s Social Security COLA Forecast Just Decreased. Here’s the Latest Estimate.

By Anzil Sheikh

Updated on:

2025's Social Security COLA Forecast Just Decreased.

If you’re curious about how much your Social Security benefits might increase next year, you’ll want to stay informed.

Millions of seniors today depend on their monthly Social Security benefits to cover essential expenses. Because of this, retirees across the country are eagerly awaiting news of the 2025 cost-of-living adjustment (COLA).

The purpose of annual COLAs is to help seniors on Social Security maintain their purchasing power as inflation drives up the cost of living. Since some people collect Social Security for many years, it’s crucial that these benefits receive a yearly boost to help seniors keep pace with rising prices.

Social Security COLAs are calculated based on inflation data from the third quarter of the year, so it’s too early to know the exact figure for 2025. That information won’t be available until October.

However, experts can make predictions about the potential increase based on recent inflation trends. And there’s a new estimate to consider. Unfortunately, it may not be the news Social Security recipients were hoping for.

Next year’s Social Security COLA could be 2.57%

Inflation eased somewhat in July, leading the nonpartisan Senior Citizens League to estimate a 2.57% Social Security COLA for 2025. This is slightly lower than the 2.63% estimate the group made the previous month.

To put it in perspective, a 2.57% COLA is not the smallest increase Social Security recipients have ever seen. However, it is a noticeable drop from this year’s 3.2% COLA, so it’s understandable that some seniors might feel disappointed by this update.

The news isn’t all bad

A smaller Social Security COLA in 2025 might initially seem like bad news. But it’s important to remember that the 2.57% figure is only an estimate and could change as more inflation data becomes available in the coming months.

Moreover, a smaller COLA indicates that inflation is slowing, which could be a relief for retirees struggling with rising living costs.

In other words, while a larger Social Security COLA in 2025 would mean a higher inflation rate and increased costs at the gas pump, grocery store, and beyond, a smaller COLA suggests that essential expenses may not rise as quickly.

That said, those who are finding it difficult to make ends meet with their Social Security checks alone should take this latest COLA estimate as a sign to explore additional income sources.

Even if next year’s COLA turns out to be higher, relying solely on Social Security is challenging and likely to lead to financial stress. Participating in the gig economy could be an effective way to supplement your income and reduce financial worries.

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Anzil Sheikh

Anzil Sheikh dedicated writer who focuses on veterans and the benefits they receive from the government. My content provides valuable, up-to-date information on government policies, ensuring that veterans stay informed about the latest developments that impact their lives. With a deep commitment to supporting those who have served, my writing offers clarity and guidance on navigating the complex landscape of veteran benefits and government programs.

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