The Social Security cost-of-living adjustment (COLA) for 2025 was revised higher than it was in January, but it remains the relative lowest adjustment seen in several years, sparking concerns about retirees’ financial well-being.
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As Newsweek reported, seniors and those living with disabilities who earn Social Security payments saw their checks grow by up to 8.7% in 2023, while in 2024, payments grew by a lot less, with just a 3.2% COLA.
This 2024 adjustment represents approximately a $50 increase for most beneficiaries, Newsweek added.
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The Senior Citizens League Weighs In
And for 2025, The Senior Citizens League (TSCL) recently revised its long-term forecast COLA to 2.4%. This is a jump from its February projection of 1.75%, yet still below 2024’s increase. The revision comes on the heels of the latest consumer price index (CPI) data, released March 12, which showed that inflation — at 3.2% — remains sticky.
The February inflation data pushed up the estimated 2025 COLA to 2.4%, which is “pretty close” to the 2.6% 20-year average, said Mary Johnson, Social Security and Medicare analyst at TSCL.
The Congressional Budget Office (CBO) also recently released an estimate of the 2025 COLA in its annual Budget and Economic Outlook for 2024 to 2034. The CBO projected that the 2025 COLA will be 2.5%, pegging it at 2.3% in 2026 — both below 2024’s increase.
The benefit boost beneficiaries saw in 2024 is still above the 2.6% average over the past 20 years, according to TSCL, but this may change as inflation slowly subsides, CNBC reported.
While TSCL found that the 2024 increase translated into an added $59 per month, it also noted that 93% of respondents to a recent survey said their household expenses increased by more than that amount per month for 2023, according to the National Association of Plan Advisors.
Indeed, 43% report household expenses exceeding $185 per month in 2023.
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This article originally appeared on GOBankingRates.com: Social Security 2025 COLA Below 20-Year Average — Is It Enough?