Part of Our Ongoing Series Examining Issues of Concern to Older Americans

It’s just a few short days away now, and seniors across the country await the news.  I’m talking, of course, about the 2025 cost-of-living adjustment (COLA) to be announced by the Social Security Administration.  This year’s announcement will be made on October 10, and the data we have suggests the COLA will be lower than what program recipients have seen in recent years. Let’s take a look.

Experts are predicting a Cost-of-Living Adjustment (COLA) that will be significantly lower than in recent years, with estimates around 2.5%. This would mark a substantial reduction from the 3.2% COLA in 2024 and is notably lower than the 8.7% increase in 2023, which was the highest since 1981.

The primary reason for the lower COLA is simply the substantial cooling of inflation in recent months. The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) — used to calculate the COLA — has shown smaller increases in recent months as inflation slows. This moderation in inflation is leading to the lower COLA estimate for 2025.

Keep in mind that this projected COLA may seem lower than average, but in fact is fairly typical from the broader perspective. Despite the projected lower increase, 2.5% COLA would still be broadly in line with the historical average of 2.6% over the past 20 years. During that time period, COLAs have ranged from 0% — in 2010, 2011, and 20016 — to as high as 8.7% in 2023.

So there you have it.  We are just a few days away from knowing the Social Security COLA for 2025.  Although the size of the projected adjustment may be smaller than we’ve seen over the past couple years, it does approximate the average increase we’ve seen over time.

By Steven Roberts