Social Security COLA For 2025 Could Be Lower, New Estimates Say
FORT MYERS, Florida - Seniors could see a smaller increase in their Social Security checks in January 2025 compared to January 2024, according to new estimates by the The Senior Citizens League.
How Social Security Cost-Of-Living Adjustments Are Calculated
The purpose of the COLA is to ensure that the purchasing power of Social Security and Supplemental Security Income (SSI) benefits is not eroded by inflation.
It is based on the percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the third quarter of the last year a COLA was determined to the third quarter of the current year. If there is no increase, there can be no COLA.
The CPI-W is determined by the Bureau of Labor Statistics in the Department of Labor.
Lower CPI-W Means Lower Social Security COLA For 2025
The April CPI-W (Consumer Price Index for Urban Wage Earners and Clerical Workers) came in at 3.4%. That's slightly lower than the inflation trends indicated last month based on February’s CPI-W data. Based on this trend, The Senior Citizens League announced that it is adjusting the long-term forecast COLA to 2.66% in 2025.
"With five months remaining until the October COLA announcement, we expect upward or downward adjustments in our monthly projections," The Senior Citizens League noted.
Average Increase To Social Security Benefits Drops In 2025
“For 2024, the average Social Security benefit rose by $50.00, and after subtracting $9.80 to cover Medicare Part B Premium increases, the total change in benefits came out to just $40.20 a month. With the forecast of a 2.66% COLA for 2025, it appears seniors will continue to suffer financial insecurity as much next year as they have this year,” says Shannon Benton, Executive Director of The Senior Citizens League.
“In The Senior Citizens League’s 2024 Senior Survey, a concerning trend emerges as 71% of respondents highlight an increase in household costs exceeding the 3.2% COLA they received for 2023.”
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