By Jack Phillips
Contributing Writer
The projected cost-of-living adjustment for Social Security recipients next year will likely be slightly higher than the 2.5% COLA that was implemented for 2025’s payments, according to The Senior Citizens League.
The group said that its modeling, which factors in consumer price index data that was released on Sept. 11, shows that the COLA will be 2.7% for next year.
“That’s the same as last month’s projection” and it would mean a raise of the “the average monthly benefit for retired workers by $54, or from $2,008 to $2,062,” the group said.
The Social Security Administration is slated to announce its COLA for next year in October, factoring in consumer price index for urban wage earner reports for the months of July, August and September. The CPI-W for July was 2.5%, and it increased to 2.8% in August.
Last October, the SSA announced a 2.5% COLA for payments that went into effect this year.
The group’s updated projection is 0.2 percentage points higher. Last month, TSCL also pointed to rising inflation risks, part of several consecutive months of upward revisions.
“Inflation is substantially higher than our model predicted at the beginning of the year. In January 2025, our model predicted that inflation would cool, and the COLA would come in at 2.1%,” the group said in a statement on Thursday.
Research by the group shows that around “39% of seniors depend on their benefits for all their income, so the COLA announcement has a direct effect on their quality of life.”
On Thursday, the Department of Labor reported that inflation increased by the most in seven months in August amid higher costs for housing and food. Excluding the volatile food and energy categories, core prices rose by 3.1%, the same as in July. Both figures are above the Federal Reserve’s 2% target.
A separate government report on Thursday showed that weekly applications for unemployment aid jumped by 27,000 to 263,000, the highest in nearly four years. Requests for jobless benefits are a proxy for layoffs. Recent reports have also shown that hiring has weakened dramatically this year and was lower than previously estimated last year.
Federal Reserve Chair Jerome Powell last month said that there are risks of both rising unemployment and stubbornly higher inflation. Yet he suggested that with hiring sluggish, the job market could weaken further.
“The shifting balance of risks may warrant adjusting our policy stance,” he said. “The stability of the unemployment rate and other labor market measures allows us to proceed carefully as we consider changes to our policy stance.”
President Donald Trump has repeatedly urged Powell to cut rates, saying there is “no inflation” and that a cut would lower the government’s interest payments on its $37 trillion in debt. Trump also has said that a rate cut would boost the flagging U.S. housing market, as rate cuts by the Fed often lead to lower rates on car loans, business borrowing and mortgages.
Also on Thursday, TSCL stated that seniors who rely on Social Security checks should “prepare for the upcoming change in how payments are delivered” because the SSA “will stop mailing paper checks to beneficiaries” by the end of September.
The Associated Press contributed to this report.
