The Senior Citizens League revised their 2025 Social Security COLA projections due to a decrease in the CPI-W, with the projected COLA for the upcoming year being approximately 2.57%.
2025 COLA decrease: Following the release of the May Consumer Price Index Report (CPI) by the Bureau of Labor Statistics (BLS), groups that publish estimates for the 2025 Social Security COLA began to work.
The CPI for Urban Wage Earners and Clerical Workers is used to determine the annual Cost-of-Living Adjustment, or COLA, provided to beneficiaries of all programs supervised by the Social Security Administration (CPI-W). When the BLS didn’t see any change in the CPI-W in May, they lowered their COLA projection for 2025.
As of the middle of June, COLA’s SCL predictions for the coming year were about 2.57%. This is less than the 2.66% number that the group gave out in May.
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A smaller COLA increase, however, would put many seniors in a worse financial situation because their benefits have not kept up with the sharp rise in living expenses that the US and other economies have faced over the past two years. According to AS News, the SCL cites research showing that “their household costs rose faster than the COLA last year,” based on a poll of over 1,500 seniors.
Across the nation, seniors are having difficulty paying their rent, buying food, and covering the cost of their prescription medications.
Housing costs, which have been the main driver of inflation this year, have been one of the expenses that seniors have found the most challenging to adjust to.
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Seeing costs grow swiftly can quickly deplete one’s purchasing power when on a fixed income, as many Social Security beneficiaries are, and it is challenging to earn back, especially when the most affected industries are vital to survival.
When, as the SCL notes, only “one of the five COLAs implemented so far in the 2020s (20%) has outpaced inflation,” it is even harder to regain purchasing power. This percentage has decreased from 40% in the 2010s and 60% in the early 2000s and 1990s.
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