The cost-of-living adjustment (COLA) for Social Security in 2025 is expected to be around 2.5%, based on recent inflation data. However, these figures do not match the current inflation rate, which raises concerns that the COLA might not adequately reflect retirees’ actual living expenses, particularly in areas such as food, housing, and healthcare.
The final COLA adjustment for 2025 will be determined in October, and current projections have highlighted a significant gap between inflation and the proposed adjustment. There have been discussions about how the decrease in inflation might impact this gap.
Projections for the 2025 COLA
With the release of new inflation data, the estimation of next year’s COLA has been revised, and it is crucial to understand its impact on beneficiaries. COLA is a critical figure for retirees, and as mentioned before, it’s a moving target since these are all just estimates.
It is important to note that these figures are prepared by experts in the field and have a significant impact on the quality of life for retirees. According to inflation data released by the federal government in May, the COLA adjustment could be around 2.5%, according to estimates from the Senior Citizens League.
Desired COLA Forecast
Other analysts, such as Mary Johnson, have forecast a slightly higher COLA, around 3%. However, the Consumer Price Index (CPI) released by the BLS showed an increase of 3.3% over the past 12 months.
Even with Mary Johnson’s higher estimate of 3%, these figures are below inflation. Similar to the 2024 COLA, many retirees feel that it was not enough to balance their income with inflation, given the specific combination of products they purchase.
The Consumer Price Index for seniors is more closely related to food and healthcare consumption, which accounts for a significant portion of retirees’ spending. Therefore, exclusively using the broad CPI does not always reflect the reality of retirees’ expenses, which leads to perceptions that the adjustment is inadequate.
Current Social Security Payments Until September 30
Social Security payments vary based on factors such as years worked, taxes paid, and retirement age:
- Retired workers: approximately $1,907 monthly.
- Retired couples (joint filing): around $3,303 monthly.
- Survivor benefits: about $1,509.50 monthly.
- Spouses of retired workers: around $910 monthly.
- Children of retired workers: approximately $892.39 monthly.
- SSI beneficiaries (individuals): around $943 monthly.
- SSI beneficiaries (couples): about $1,415 monthly.
Congressional Efforts to Overhaul Social Security Rules
Lawmakers in the U.S. House of Representatives have gathered the necessary signatures to prompt a vote on a bill aimed at removing provisions that decrease Social Security benefits for some retirees who also have pension income. This movement signifies a critical step towards addressing long-standing concerns about fair treatment for public sector retirees.
On Thursday morning, Representatives Abigail Spanberger, a Democrat from Virginia, and Garret Graves, a Republican from Louisiana, announced that a discharge petition had garnered 206 signatures. They held a press conference outside the Capitol, alongside organizations representing police officers, firefighters, postal workers, teachers, and other government employees who are often affected by these rules.
Impact of the Proposed Legislation
By Thursday afternoon, the number of signatures had risen to 218, sufficient to compel a vote on the bill. This bipartisan effort highlights the urgency and widespread support for reforming how Social Security benefits are calculated, particularly for those who have dedicated their careers to public service and face reduced benefits due to current regulations.
The bipartisan bill, known as the Social Security Fairness Act, seeks to eliminate the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO). These rules currently affect nearly 3 million Americans by reducing their Social Security benefits. This legislation aims to ensure fair and equitable treatment for all retirees, regardless of their career paths.
If passed, the proposed law would substantially affect retirees nationwide, particularly those who have worked in public sector jobs and are entitled to both a pension and Social Security benefits. The bill promises to restore the financial security of many individuals who have been financially disadvantaged by the existing provisions.