The Social Security Cost-of-Living Adjustment (COLA) Forecast for 2025 Was Just Updated. There's Good News and Bad News for Retirees.
Social Security benefits get annual cost-of-living adjustments (COLAs) to help beneficiaries keep pace with rising prices across the economy. Inflation has moderated in recent months, and that trend is expected to continue, so The Senior Citizens League (TSCL) recently revised its 2025 COLA forecast downward, albeit modestly.
"The 2025 COLA prediction is about 2.57%, down from 2.63% last month," according to TSCL statistician Alex Moore. The good news is that COLAs are rounded to the nearest tenth of a percentage point, so both estimates imply payouts will increase by 2.6% in 2025. The bad news is that it would be the smallest raise for retired workers since 2021.
However, there is a more serious problem: TSCL estimates Social Security benefits have lost 20% of their purchasing power since 2010 because COLAs have consistently failed to keep pace with inflation. The accuracy of that figure is debatable, but other evidence supports the idea that benefits have lost purchasing power.
Source Fool.com
