FINANCE
Continued inflation could mean a higher COLA for Social Security benefits in 2025
As consumer prices continue to rise, seniors and other beneficiaries of other SSA programs could see a larger COLA in 2025.
Though price increases have slowed in recent months, the March Consumer Price Index (CPI) report shows a continued uptick in the average cost of goods and services purchased in the United States. While bad news in the short-term, this could mean that seniors and other recipients of Social Security Adminstration (SSA) benefits. Though the Cost-of-living adjustment (COLA) offered by the SSA will not be announced until October, there are some early signs that it could surpass that offered in 2024.
More from AS USA:
How is the COLA calculated?
To determine the COLA, the SSA compares the CPI-W (a slightly more tailored index) for the third quarter of the year (July, August, and September) - before the CPI-W for the current year’s third quarter. While these figures will not be available for some time, since October, the BLS has tracked a 1.5 percent increase in the CPI-W as of March.
Why could the 2025 COLA be larger than that offered this year?
Last year, the COLA offered to beneficiaries was 3.2 percent, meaning that if prices continue to rise at their current levels or more, the benefit increase will exceed that provided this year. However, prices could begin to fall, and while that may lead to a smaller COLA, Social Security recipients will see their purchasing power begin to increase.