As the announcement of the 2025 Social Security cost-of-living adjustment (COLA) approaches, forecasts indicate a modest increase for the program’s over 68 million beneficiaries, The Motley Fool reports.
The upcoming COLA, expected to be revealed on October 10, plays a critical role in adjusting benefits to keep pace with inflation, ensuring that Social Security recipients maintain their purchasing power.
For 2025, projections from both the Senior Citizens League (TSCL) and independent analysts suggest a 2.5% COLA, marking the smallest adjustment since 2021. Based on this forecast, the average Social Security benefit, which stood at $1,783.55 in August 2023, is expected to rise by approximately $44.59 per month. Retired workers would see an increase of $48.01 per month, raising their average monthly check to $1,968.49, while disabled workers and survivor beneficiaries can expect smaller increases.
Despite this anticipated boost, many retirees may still struggle to keep up with the rising costs of essential services like healthcare and housing. Inflation in these sectors, especially medical care, continues to outpace the projected COLA. As such, a majority of beneficiaries are expected to see a reduction in their purchasing power, further strained by potential increases in Medicare Part B premiums, which are projected to rise by 5.9% in 2025.
While the 2025 COLA will provide some relief, experts warn that retirees may need to supplement their income through personal savings, part-time work, or other means to cover the shortfall created by rising expenses.
