Social Security's Cost-of-Living Adjustment in 2025: A Closer Look

Sunday, 31 March 2024, 07:44

Social Security's 2025 COLA is expected to disappoint retirees with lower projections compared to recent years. Estimates from the CBO and TSCL suggest a modest increase of 1.75% to 2.5%, impacting the purchasing power of beneficiaries. Despite recent years of healthy COLAs, retirees may face declining real incomes due to rising inflation rates, particularly in shelter and medical-care costs.
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Social Security's Cost-of-Living Adjustment in 2025: A Closer Look

Social Security's 2025 COLA Expectations

A Social Security dollar isn't what it used to be. Most Americans rely on Social Security, with 22.7 million lifted above poverty each year.

COLA Calculation and Trends

  • Pre-1975: COLAs were arbitrary.
  • Since 1975: CPI-W used for inflation.
  • Inflation Calculation: Based on Q3 CPI-W readings.

Beneficiaries: Estimated 1.75% to 2.5% COLA for 2025.

Impact on Retirees

  1. Projected Effects: 1.75% to 2.5% COLA for 2025.
  2. Purchasing Power: Declining real incomes due to inflation.

This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.


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