Bad news for people on Social Security. The cost of living adjustment estimate is lower for 2025 than in the past few years.
The government announced on Wednesday that the COLA for next year is at 2.6% after inflation slightly lessened last month, USA Today reported.
That means people on Social Security will see more money in 2025 than 2024, but not as much as they are used to getting, Nasdaq explained. CNBC reported that last year’s COLA increase was 3.2% and in 2023 it was 8.7% while in 2022 it was 5.9%.
The COLA estimate in July was 2.7%.
If the adjustment stays at 2.6% for next year, it will be about average for the past 20 years and the lowest since 2021, Mary Johnson told USA Today. She is a retired analyst for Senior Citizens League which tracks the COLA estimates,
The news comes as the consumer price index (CPI) which is the prices of goods and services went up 2.9% in July, compared to last year, but was down 3% since June.
The rate is not set for 2025. That will happen in October, Nasdaq said.
But Johnson told MarketWatch that the COLA could slip some more by that time, adding that it could go as low as 2.57%.
The current average Social Security benefit was $1.781 a month. If COLA stays at 2.6%, beneficiaries will get about $46 more a month, but they won’t see that entire amount as Medicare Part B premiums are deducted from Social Security payments. The premiums are expected to be about $185 each month, up from $174.70 this year, MarketWatch reported.
©2024 Cox Media Group
