By Leada Gore
Social Security recipients are on track for a slightly higher cost-of-living adjustment in 2025 but rising costs will likely eat away any extra benefits, experts are warning.
Non-partisan advocacy group The Senior Citizens League’s latest estimate for 2025′s COLA is 2.66%, up from 2.6% last month and 1.75% from two months ago. The increase is due to figures from the March Consumer Price Index for Urban Wage Earners and Clerical Workers which came in at 3.4%.
In 2024, Social Security recipients receive a 3.2% COLA, much lower than 2023′s historic 8.7% increase.
Estimates change monthly and could go up or down significantly before 2025′s COLA is announced in October because it’s based on the average inflation rate during the third quarter – July, August and September – when compared to the same period a year prior.
“With five months remaining until the October COLA announcement, we expect upward or downward adjustments in our monthly projections,” TSCL said in a statement.
But the slight increase in projected benefits isn’t enough to overcome inflation and rising prices, including expenses related to Medicare Part B, according to Shannon Benton, Executive Director of TSCL.
“For 2024, the average Social Security benefit rose by $50, 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,” Benton said.
TSCL’s 2024 Senior Survey showed just how much rising costs are hitting seniors. According to the survey, 71% of individuals said household costs rose by more than 3.2% in 2023, the year used to determine the COLA. Fifty-three percent said they’d spent emergency savings while 43% said household expenses increased by more than $185 per month. Sixty-one percent indicated that food is their expense with the greatest increase.
“If the COLA increases by 2.6%, that will be an approximately $45 increase. What can you buy for that? Not much,” Benton said.
Some 70 million people receive benefits from programs administrated by the Social Security Administration.
