The Social Security Cost-of-Living Adjustment (COLA) Forecast for 2025 Was Just Updated, and It Comes With Bad News and Worse News for Retirees

The Social Security Administration's forecast for the 2025 cost-of-living adjustment (COLA) suggests a decrease to 2.6%, according to The Senior Citizens League. This is concerning for retirees as previous COLAs were higher, at 8.7% and 3.2%, respectively. The reduced COLA may not sufficiently address inflation impacts, exacerbating financial difficulties for retirees.

Furthermore, the COLA, based on the CPI-W, may not accurately reflect the spending patterns of retirees, who generally spend more on healthcare and housing. Experts suggest using the Consumer Price Index for the Elderly (CPI-E), which showed a higher inflation rate, indicating that Social Security benefits might lose more purchasing power than anticipated.