Social Security beneficiaries may expect a modest increase in their benefits next year, as The Senior Citizens League (TSCL) predicts a cost-of-living adjustment (COLA) of 2.5 percent for 2025. This forecast suggests a return to more typical levels of benefit adjustments after several years of higher COLA due to record inflation. The Social Security Administration (SSA) is set to announce the official COLA for 2025 in mid-October.
If the COLA for 2025 is indeed 2.5 percent, the average Social Security monthly benefit of $1,920 would increase by approximately $48 per month. While this increase may seem small, it can make a significant difference for seniors who rely on Social Security as a substantial portion of their income.
According to TSCL’s 2024 Retirement Survey, 65 percent of respondents reported monthly expenses of at least $2,000, a notable increase from 55 percent in 2023. Additionally, nearly 80 percent of senior households experienced rising essential expenses like food, housing, and prescription drugs over the past year. These findings highlight the importance of ensuring that seniors have enough to meet their basic needs with dignity.
Shannon Benton, TSCL’s executive director, emphasized the need for a minimum COLA of 3 percent, stating that approximately two-thirds of seniors rely on Social Security for more than half of their monthly income, and 28 percent depend on it entirely. Advocating for a higher COLA is crucial to support seniors in maintaining a decent standard of living.
TSCL’s forecast aligns with the most recent consumer price data, which showed a slowdown in inflation in August. The annual pace of inflation decreased to 2.5 percent, down from 2.9 percent the previous month. However, core inflation, which excludes volatile categories like energy and food, remained steady at 3.2 percent in annual terms. The core consumer price index (CPI) also increased at a higher-than-expected pace of 0.3 percent, suggesting underlying inflationary pressures.
Greg McBride, chief financial analyst at Bankrate, noted that inflation continues to impact Americans, and the rise in the monthly core CPI was disappointing. McBride emphasized that a lower rate of inflation does not mean prices are coming down but rather that they are not rising as rapidly. Many households are still feeling the strain of the rapid increase in prices that has stretched their budgets.
Although food inflation remained relatively unchanged in August, certain items within the category experienced month-over-month gains. Eggs saw a 4.8 percent increase, while chicken, beef and veal, fresh fruits, and milk all showed smaller increases. These price fluctuations indicate the ongoing challenges faced by seniors and other consumers when it comes to meeting the rising costs of essential goods.
In conclusion, the projected COLA of 2.5 percent for 2025 may provide some relief to Social Security beneficiaries, but it is crucial to recognize the larger context of seniors’ financial needs. Rising expenses and inflation continue to impact seniors’ ability to cover their basic necessities. Advocacy for a higher minimum COLA is necessary to ensure that seniors can live with dignity and financial security.
 to support seniors' basic needs. Learn about the current inflation rates and the challenges faced by seniors in meeting rising expenses. Ensure seniors can live with dignity and financial security. Read more here.){kind=link}