Social Security COLA for 2025 Estimated at 1.75%

The Senior Citizens League estimates the Social Security cost-of-living adjustment, or COLA, for 2025 is likely to be 1.75%, based on the latest consumer price index data, released Tuesday.

The 2024 cost-of-living adjustment for Social Security beneficiaries is 3.2%.

The January Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), came in at 2.9%. That’s higher than the inflation trends indicated last month based on December CPI-W data, according to the advocacy group.

In the league’s 2024 Senior Survey, 73% of respondents said their household costs rose by more than 3.2% in 2023; plus, 38% are worried that their 2024 COLA will fall short of inflation this year.

The group cautions that the final COLA for 2025 is “likely to be different from the estimates because the COLA is calculated on the average rate of inflation during the third quarter … which is compared against the third quarter a year ago.”

The Congressional Budget Office recently released its COLA projection for 2025, which is 2.5%.

The CBO uses a different methodology than TSCL does, the group says, adding: “Clearly, inflation rates are expected to fall from 2023 levels, and the COLA for 2025 will also be lower.”

Credit: David Palmer/ALM