Here's How the Estimated 2025 Social Security Cost-of-Living Adjustment (COLA) Could Compare to the Last 20 Years


COLA rates have been very high for the last few years, but cooling inflation is changing that.

We’re less than two weeks away from the 2025 Social Security cost-of-living adjustment (COLA) announcement. The government will have the last piece of data it needs to do the calculation on Oct. 10, 2024. Once we know the COLA percentage, retirees will be able to estimate how much they’ll get from the program next year.

While it’s pretty much certain that checks will get a boost, those hoping for a large COLA like the ones in 2022 and 2023 are going to be disappointed. Here’s what beneficiaries can expect and how it compares to the 20-year COLA average.

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The 2025 COLA won’t be anything to write home about

The latest projections from The Senior Citizens League (TSCL) indicate that the 2025 Social Security COLA will probably be around 2.5%. This rate reflects cooling inflation. It’s much lower than COLAs in recent years. In 2024, seniors got a 3.2% COLA, and in 2022 and 2023, COLAs were 5.9% and 8.7%, respectively.

While a 2.5% bump is comparatively underwhelming, it’s actually not that unusual. The 20-year average is just 2.6%. And there were a few years over the last two decades when beneficiaries didn’t get a COLA at all.

That said, a 2.5% COLA probably won’t be adequate for all retirees. It’ll add just $48 to the $1,920 average monthly check as of August 2024. Many seniors have likely seen their monthly expenses rise by more than this amount over the last year.

TSCL reported that Social Security has actually lost 20% of its buying power since 2010 as a result of COLAs not keeping up with seniors’ rising living costs. Unfortunately, only the federal government can change the COLA calculation. So for now, beneficiaries will have to do the best they can with what they receive.

What to do after the government announces the 2025 COLA

Though experts expect the 2025 COLA to be close to 2.5%, it could be slightly higher or lower, depending on the September inflation data. Once the government announces it, you can estimate what your checks will be next year.

Add the COLA percentage to your existing checks to get a decent approximation of what you’ll get in 2025. This might be off by a dollar or two, but it should be pretty close. The Social Security Administration will send you a personalized COLA notice in December with your exact 2025 benefit amount.

After calculating your 2025 checks, see how this compares to your average monthly expenditures. You’ll have to find a way to cover the difference on your own. Ideally, you’ll have enough personal savings to pull this off. If not, you may have to explore other options, like taking on a part-time job, reducing expenses, or seeking out other types of government assistance for your essential expenses.

It’s best to prepare for any changes you need to make before the new year arrives so you’re not caught off guard once your new checks arrive. If you have any questions about your new benefit amount after receiving your personalized COLA notice in December, reach out to the Social Security Administration for assistance.



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