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Illustration of Social Security card saying COLA: Since 1975

Retirement Planning > Social Security

Social Security 2025 COLA Estimate Jumps to 2.4%

By John Manganaro

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The Senior Citizens League estimates the Social Security cost-of-living adjustment, or COLA, for 2025 is likely to be 2.4%, based on the latest consumer price index data, released Tuesday.

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

The February Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) rose 3.1% from 13 months ago. That’s higher than the inflation trends indicated last month based on January’s inflation data, according to the advocacy group. As a result, the League’s 2025 COLA projection has jumped from 1.75%.

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.”

February Inflation Highlights

As reported by the BLS, the Consumer Price Index for All Urban Consumers — a measure of inflation that is broader than the CPI-W — increased 0.4% in February on a seasonally adjusted basis, after rising 0.3% in January. Over the last 12 months, the all items index increased 3.2% before seasonal adjustment.

The index for shelter rose in February, as did the index for gasoline. Combined, these two indexes contributed over 60% of the monthly increase in the index for all items. The energy index rose 2.3% over the month, as all of its component indexes increased.

The food index was unchanged in February, as was the food at home index. The food away from home index rose 0.1% over the month. The index for all items less food and energy rose 0.4% in February, as it did in January.

Indexes which increased in February include shelter, airline fares, motor vehicle insurance, apparel and recreation. The index for personal care and the index for household furnishings and operations were among those that decreased over the month.

Credit: David Palmer/ALM 

John Manganaro

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