Miami, Florida – Social Security beneficiaries may face a smaller cost-of-living adjustment (COLA) in 2025, according to early projections. The anticipated decrease from current and previous years could impact millions relying on these benefits for their financial security.
The Senior Citizens League (TSCL) projects a slight 1.75% increase in COLA for 2025, based on the latest data from the Consumer Price Index for Urban Wage Earners and Clerical Workers. However, TSCL emphasizes that this estimate is subject to change as more data becomes available throughout the year.
On the other hand, the Congressional Budget Office (CBO) offers a slightly higher estimate of 2.5% for the 2025 COLA. Both TSCL and CBO projections indicate a downturn in the COLA compared to recent years, reflecting a broader trend of decreasing inflation rates.
The final determination of the COLA for 2025 will be based on figures from the third quarter of the year when compared to the same period in the previous year. TSCL and CBO projections provide essential insights for individuals planning their finances based on Social Security benefits.
If TSCL’s projection of a 1.75% increase holds, it would be the smallest adjustment since 2020. This contrasts with previous years that saw more significant increases, such as the 8.7% adjustment in 2022 – the highest since 1981.
As inflation rates continue to decline, the projected decrease in the 2025 Social Security COLA is a reflection of this trend. The final adjustment remains uncertain, but early projections indicate a noticeable decrease compared to recent years, underscoring the importance of effective financial planning for Social Security beneficiaries.