--- title: Social Security Recipients on Track to Get Smallest COLA Raise Since 2021 description: Social Security beneficiaries are now projected to get a 2.5% cost-of-living adjustment, or COLA, for 2025, per the latest forecasts. authors: - name: Kaitlin Mulhere role: Editor url: https://money.com/author/kaitlin-mulhere/ bio: Kaitlin Mulhere is an editor at Money.com. Since joining in 2015, she’s written and edited about a variety of personal finance topics, including banks, credit, student debt, saving strategies and more. education: University of Florida at_money_since: 2015 articles: 217 covers: - Retirement - Banking - Business - Career Advice - Credit - Credit Cards - Debt - Economy and Politics - Education - Health and Wellness - Housing - Identity Theft - Insurance - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Shopping - Taxes social: - https://twitter.com/KMulhere - https://www.linkedin.com/in/kaitlin-mulhere-64503048/ editors: - name: Julia Glum role: Managing Editor url: https://money.com/author/julia-glum/ bio: Julia Glum joined Money in 2018 and specializes in covering financial trends that affect everyday Americans' wallets. She also writes Dollar Scholar, a weekly newsletter that teaches young adults how to navigate the messy world of money. education: University of Florida at_money_since: 2018 articles: 453 covers: - Retirement - Banking - Business - Career Advice - Credit - Credit Cards - Debt - Economy and Politics - Education - Health and Wellness - Housing - Identity Theft - Insurance - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Professional Services - Shopping - Taxes - Technology also_seen_in: - Newsweek - International Business Times - CBS News - Good Morning America - WUSA9 - Pix 11 - The New York Times - Mashable - The Washington Post - CNBC - Politico social: - https://x.com/superjulia - https://www.linkedin.com/in/julia-glum published: '2024-09-11T15:36:53.000Z' modified: '2024-09-11T15:36:53.000Z' section: Retirement tags: - News word_count: 628 canonical: https://money.com/social-security-cola-2025-estimate-decreases/ type: NewsArticle source: structured-blocks --- > **Disclosure:** We research all brands listed and may earn a fee from our partners. Research and financial considerations may influence how brands are displayed. Not all brands are included. [Learn more](https://money.com/page/disclaimer/). ![Senior hands stretching a Social Security Card](https://img.money.com/2024/09/News-Latest-Estimate-COLA1.jpg) Social Security payments are on track to get a 2.5% bump next year, thanks to an annual cost-of-living adjustment. The new prediction for the 2025 COLA, which comes from The Senior Citizens League, is based on the inflation numbers released by the Bureau of Labor Statistics on Wednesday. The latest COLA forecast is a slight decrease from [last month’s estimate](https://money.com/social-security-cola-2025-prediction-decrease/) of 2.57%, as inflation continues to inch down. The final COLA won’t be announced until October, after the Social Security Administration [calculates it based on the average](https://money.com/how-social-security-benefits-cola-calculated/) inflation rate from July, August and September. But the league, a nonpartisan group that advocates for older adults, puts out monthly estimates in the lead-up to that calculation to help the more than 72 million Americans who rely on Social Security benefits. ## Select your state to get started with a Reverse Mortgage ### If you're 62 or older\*, a Reverse Mortgage from Finance of America (NMLS# 2285) could help you build a more financially secure retirement. [Learn More](https://money.com/pr/fb272d48a2bd?ap_referrer=%2Fsocial-security-cola-2025-estimate-decreases%2F) \*62 is the minimum age for HECM's. Certain proprietary reverse mortgages may have a lower minimum. ## Latest Social Security COLA predictions for 2025 The COLA is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W, which increased 2.4% year over year in August. That metric fell from July, when it was 2.9%. In a separate forecast, Mary Johnson, an independent Social Security and Medicare policy analyst, also pegged the COLA for next year at 2.5%, based on inflation data through August. Like the prediction from The Senior Citizens League, her estimate represents a decline from last month, when she predicted a 2.6% COLA. Monthly fluctuations in COLA estimates are common. But given that inflation has been cooling for several months now, it's clear now that Social Security beneficiaries will end up with a smaller annual adjustment in 2025 than they received this year, when the [COLA was 3.2%](https://money.com/social-security-cola-2024/). “The 2025 COLA will be the lowest received by Social Security beneficiaries since 2021, \[when\] at the same time inflated prices persist on key essentials such as housing, meats, auto insurance, any type of service and repairs,” Johnson said in an email. Still, she points out, a 2.5% COLA is in line with the long-term average. ## Medicare costs don’t factor into Social Security COLA The average retiree benefit is about $1,870, which means a COLA around 2.5% would increase the typical payment by about $47 per month. But Social Security recipients won’t have a more precise idea of their payment amounts next year until the Medicare Part B premium is announced, according to Johnson. The Part B premium is automatically deducted from retirees’ monthly benefit. She calculates that Medicare Part B premiums and deductibles grew at double the rate of the annual Social Security cost-of-living adjustments over the past two decades, which means health care costs have eaten up a bigger portion of retirees’ Social Security checks. Johnson’s analysis, based on Medicare data from 2005 to 2024, found that Part B premiums increased on average by 5.5% per year. That’s compared to an average annual increase of 2.6% for COLAs. Medicare costs are not included in the consumer price index that’s currently used to calculate the COLA. That’s one major reason why some lawmakers want to [change the way the COLA is calculated](https://money.com/social-security-cola-cpi-e/). The current metric used, the CPI-W, considers price inflation for working adults who are younger than 62. But some argue that using a different price index, the Consumer Price Index for the Elderly (CPI-E), could better represent what older adults actually have to spend on health care and other common expenses. In March, the Medicare Trustees estimated that the Part B premium for 2025 would be $185 a month, up more than $10 from $174.70 a month this year. The final premium amount will be announced this fall. ## Is a Reverse Mortgage right for you? ### With Finance of America (NMLS# 2285), you could get the most out of your Reverse Mortgage loan. Click below and start Planning your future today. [Learn More](https://money.com/pr/e58184323a1f?ap_referrer=%2Fsocial-security-cola-2025-estimate-decreases%2F) ![](https://s3.consumersadvocate.org/prd/image/image/39553/medium_d01d803f-1110-4310-8997-bada342c27e4.webp) Get the most out of your Reverse Mortgage with Finance of America (NMLS #2285) [Learn More](https://money.com/pr/v5cb776331b0?ap_referrer=%2Fsocial-security-cola-2025-estimate-decreases%2F) ```json { "@context": "https://schema.org", "@graph": [ { "@type": "BreadcrumbList", "@id": "https://money.com/social-security-cola-2025-estimate-decreases/#breadcrumb", "itemListElement": [ { "@type": "ListItem", "position": 1, "name": "Home", "item": "https://money.com" }, { "@type": "ListItem", "position": 2, "name": "Retirement", "item": "https://money.com/retirement/" }, { "@type": "ListItem", "position": 3, "name": "Social Security", "item": "https://money.com/social-security/" }, { "@type": "ListItem", "position": 4, "name": "Social Security Recipients on Track to Get Smallest COLA Raise Since 2021" } ] }, { "@type": "WebSite", "@id": "https://money.com/#website", "url": "https://money.com", "name": "Money", "publisher": { "@id": "https://money.com/#organization" } }, { "@type": "WebPage", "@id": "https://money.com/social-security-cola-2025-estimate-decreases/#webpage", "url": "https://money.com/social-security-cola-2025-estimate-decreases/", "name": "Social Security Recipients on Track to Get Smallest COLA Raise Since 2021", "isPartOf": { "@id": "https://money.com/#website" }, "datePublished": "2024-09-11T15:36:53.000Z", "mainEntity": { "@id": "https://money.com/social-security-cola-2025-estimate-decreases/" }, "inLanguage": "en-US", "breadcrumb": { "@id": "https://money.com/social-security-cola-2025-estimate-decreases/#breadcrumb" }, "dateModified": "2024-09-11T15:36:53.000Z" }, { "@type": "NewsArticle", "headline": "Social Security Recipients on Track to Get Smallest COLA Raise Since 2021", "articleSection": "Retirement", "image": [ { "@type": "ImageObject", "url": "https://img.money.com/2024/09/News-Latest-Estimate-COLA1.jpg", "width": 2133, "height": 1267, "caption": "News-Latest-Estimate-COLA" } ], "author": [ { "@type": "Person", "name": "Kaitlin Mulhere", "url": "https://money.com/author/kaitlin-mulhere/", "@id": "https://money.com/author/kaitlin-mulhere/#author", "description": "Kaitlin Mulhere is an editor at Money.com. 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