The latest data released by the US non-profit organization, The Senior Citizens League, shows that benefits for American Social Security recipients are expected to increase by 2.63% in 2025, marking the smallest increase in recent years.
According to the non-partisan advocacy group’s latest forecast released on Thursday, July 11th, the benefits for Social Security recipients next year are projected to decrease significantly, with an increase of only 2.63%. This means that the Cost-of-Living Adjustment (COLA) for 2025 will be the lowest in recent years, and given the current level of inflation, many elderly people will further feel the pressure of rising living costs.
The inflation rate, measured by the Consumer Price Index (CPI), dropped to 3.0% in June, which is also used to calculate the COLA for Social Security recipients.
From 2020 to 2023, the cost of groceries directly tracked by the CPI has risen by 24%, with many major food items, including bread, seeing cost increases of more than a third.
In The Senior Citizens League’s 2024 Senior Survey, 60% of retired individuals surveyed stated that food expenses are the fastest-growing category in their monthly budgets, surpassing housing expenses by more than two times.
From the onset of the pandemic in January 2020 until December 2023 post-pandemic, the Consumer Price Index increased by 20%, while the total increase in COLA was only 19%.
The Senior Citizens League stated in its June report, “This year’s Cost-of-Living Adjustment will be crucial as many seniors have expressed that last year, the adjustment did not keep up with their actual expenses.”
The latest estimate by The Senior Citizens League for COLA is higher than their June estimate, where they predicted a 2.57% increase in COLA for 2025. Despite this, their latest forecast for COLA is still lower than the 3.2% increase in 2024, and falls far short of the 8.7% and 5.9% increases Social Security recipients received in 2023 and 2022 respectively.
The Senior Citizens League releases its latest Cost-of-Living Adjustment forecast every month. The Social Security Administration (SSA) will announce the COLA rate for the following year in October.