Social Security Cost of Living Increase
More than 71 million Social Security beneficiaries can expect a 2.5% cost of living adjustment (COLA) increase in 2025, based on the Q3 inflation data so far.
In other words, the COLA will raise the average benefit by $48 to $1,968 a month. This is a welcomed increase for some, given inflation during the past year, but it is a drop off from bumps in recent years.
The Social Security Administration is scheduled to announce the official 2025 benefits increase on October 10. But don’t expect the final number to change much, if at all, at this point.
The adjustment is based on the average annual increase in the consumer price index (CPI) for urban wage earners and clerical workers (CPI-W) from July through September. Through August, CPI-W rose 2.4% in the past 12 months, compared to a 2.5% increase in CPI.
Over the years, we have learned that almost every retiree (91%) say that Social Security is a source of their retirement income. Almost two-thirds (62%) say it’s a major source.
When we create a retirement strategy, we make certain assumptions about income and expenses. If you think this year’s COLA will make your budget a bit more challenging, we can work with you. Sometimes, a slight adjustment can be all it takes to make pur clients feel more comfortable as we head into 2025.
The outlook for the Social Security cost of living adjustment is a forecast, and forecasts or forward-looking statements are based on assumptions, subject to revision without notice, and may not materialize.
CNBC.com, September 11, 2024. “Social Security cost-of-living increase for 2025 could be 2.5% — the lowest since 2021, estimate finds”
TheHill.com, September 11, 2024. “The estimated Social Security increase for 2025 keeps dropping”
EBRI, Retirement Confidence Survey, 2024.
This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm.
