The May inflation data that was recently revealed has prompted estimates for the Social Security cost-of-living adjustment (COLA) for 2025. The Senior Citizens League (TSCL) has estimated that the COLA in 2025 may be 2.57%, which would be a reduction from the 3.2% COLA in 2024.
The May inflation data that was recently revealed has prompted estimates for the Social Security cost-of-living adjustment (COLA) for 2025. The Senior Citizens League (TSCL) has estimated that the COLA in 2025 may be 2.57%, which would be a reduction from the 3.2% COLA in 2024.
However, using a different methodology, independent Social Security and Medicare policy expert Mary Johnson projects a slightly higher 3% COLA for 2025—a figure that is still below the 2024 increase.
I’ll bet the politicians give themselves another big fat pay increase, though.
2025 COLA prediction brings bad news for 72 million Americans on Social Security https://t.co/jLSjgnErEW
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GHOST IN THE MACHINE
The consumer pricing index (CPI) statistics for May from the Bureau of Labor Statistics, which showed a 3.3% increase in inflation over the previous year as assessed by the Consumer pricing Index for Urban Wage Earners and Clerical Workers (CPI-W), served as the basis for these calculations.
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Social Security COLA is expected to decline to 2.57% by 2025
Since the final COLA for 2025 will be based on the average inflation rate for the third quarter—that is, July, August, and September—it may differ from these estimates. The percentage change in the CPI-W from the same time last year will be used to calculate this. The announcement of the annual COLA usually takes place in mid-October every year.
Newest 2025 Social Security COLA projections predict an even smaller increase than last year https://t.co/MyjOGWzqOG
— Kalamazoo Gazette (@Kzoo_Gazette) June 13, 2024
Concerns have been voiced by TSCL and Johnson on the accuracy of determining the yearly COLA using the CPI-W. They think it underrepresents the real rise in costs that pensioners actually confront.
Johnson highlighted that over the previous 12 months, the CPI-W climbed by 3.3%, suggesting a higher degree of inflation than what the existing computation method might be able to reflect.
These estimates and worries draw attention to how difficult and important it is to calculate the COLA because it has a direct bearing on the incomes of millions of retirees who rely on Social Security payments. The ultimate adjustment for 2025 will significantly affect the financial security of pensioners.
It is imperative that we take into account the possible effects of these adjustments on retirees and their capacity to cover their living expenditures while we wait for the formal announcement in October.
