Social Security COLA raise: How much will recipients get in 2025?
According to The Hill, The Social Security Administration is just under two weeks away from announcing its cost-of-living adjustment (COLA), which reflects the percentage increase in recipients’ payments designed to counteract inflation.
COLA Forecast for 2025
Current estimates suggest that the COLA will be around 2.5%, but we’ll have to wait for the official announcement on October 10 to confirm the exact figure. This estimate comes from The Senior Citizens League (TSCL) and reflects a decline in consumer price inflation from 2.9% in July to 2.5% in August.
Shannon Benton, TSCL’s executive director, emphasized the importance of adequate COLA adjustments: “Ensuring that seniors have enough to feed and house themselves with dignity is a major reason why we advocate for a minimum COLA of 3%.” According to TSCL research, approximately two-thirds of seniors rely on Social Security for more than half of their monthly income, while 28% depend on it entirely.
Historical Context of COLA Adjustments
The projected 2.5% increase is notably less than the 3.2% bump beneficiaries received in 2024. The Social Security Administration calculates the COLA using average inflation data from the Consumer Price Index during the months of July, August, and September.
Although there has never been a negative adjustment, the COLA has dipped as low as 0% in 2010, 2011, and 2016. In contrast, the largest COLA in the last two decades was 8.7%, reflecting the soaring inflation rates of 2023. The highest COLA on record was 14% in 1980, according to SSA data.
The Impact of Rising Costs on Seniors
TSCL highlights that a combination of escalating healthcare costs and inadequate COLAs has significantly eroded the purchasing power of these adjustments by “over thirty percent.” Notably, rising Medicare costs are not factored into the COLA calculations, prompting some politicians to propose changes.
U.S. Rep. Ruben Gallego (D-AZ) stated, “A monthly Social Security check is how most seniors make ends meet; we need it to pay our bills and cover health co-pays and medications.” In response to these concerns, Gallego introduced the Boosting Benefits and COLAs for Seniors Act in March.
Legislative Action and Future Prospects
While the bill has been introduced and referred to the Committee on Finance, it has yet to be voted on in Congress. The proposed legislation aims to enhance benefits for seniors, reflecting the urgent need for adjustments that keep pace with rising costs of living and healthcare.
