By Tom Ozimek
Contributing Writer
Social Security beneficiaries may see a modest increase in their benefits next year, with The Senior Citizens League forecasting that the cost-of-living adjustment for 2025 will be 2.5%, the lowest level since 2021.
It noted that a 2.5% increase would raise the average Social Security monthly benefit of $1,920 by approximately $48 per month.
Though the COLA has been higher in recent years due to record inflation — notably 8.7% in 2023 and 5.9% in 2022 — TSCL’s forecast suggests a return to more typical levels of benefit adjustments.
The Social Security Administration is set to announce the official COLA for 2025 in mid-October.
TSCL’s 2024 Retirement Survey found that 65% of respondents reported monthly expenses of at least $2,000, a significant rise from 55% in 2023. The survey, which included more than 2,100 participants, also revealed that nearly 80% of senior households experienced increases in essential expenses such as food, housing and prescription drugs over the past year.
“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 [percent],” Shannon Benton, TSCL’s executive director, said in a statement on Sept. 11. “TSCL research shows 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.”
The latest COLA estimate from TSCL reflects the most recent consumer price data, released on Sept. 11, which showed inflation slowing in August to an annual pace of 2.5%, a decline from 2.9% the prior month.
Core inflation, which removes the volatile energy and food categories, held steady at 3.2% in annual terms. However, the core consumer price index jumped at a higher-than-expected pace of 0.3%, up from 0.2% in the previous month, suggesting elevated underlying inflationary pressures.
Greg McBride, chief financial analyst at Bankrate, said that inflation continues to affect Americans and that the rise in the monthly core CPI was disappointing.
“Households know all too well the difference between ‘moderating inflation’ and ‘high prices.’ A lower rate of inflation just means prices aren’t going up as fast as they had, not that prices are coming down in any broad way,” he said in an emailed statement. “Even a more customary pace of inflation doesn’t erase the rapid run-up in prices that has stretched household budgets, a strain millions of Americans are still feeling.”
Even though food inflation was little changed in August, many items within the category showed month-over-month gains, such as eggs (4.8%), chicken (0.7%), beef and veal (0.3%), fresh fruits (0.7%), and milk (0.6%).
Andrew Moran contributed to this report.
