Needless to say, Social Security retirement and SSDI benefits are great financial support for more than 70 million Americans. Thanks to the COLA or the Cost of Living Adjustment, retirees and disability recipients can maintain their purchasing power.
The latest estimate is not a very positive one. Bear in mind that Social Security increased benefits by 8.7% in 2023. That increase went down to 3.2% in 2024. Millions of retirees and disability beneficiaries were utterly disappointed and things seem to be even worse for 2025.
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WHICH IS THE SOCIAL SECURITY’S 2025 COLA ESTIMATE?
The latest projection by the Congressional Budget Office, known as CBO, announced that there could be a COLA increase for Social Security benefits of about 2.5%. Therefore, if it becomes true, recipients will get a lower increase. Getting 0.7% less would be a blow for many low-income beneficiaries.
For your information, retirees have received on average 59 dollars thanks to the 2024 COLA boost. Therefore, retirees could get from the Social Security 2025 COLA increase about 47 dollars extra per month.
Not only has CBO announced an estimate, but also the Senior Citizens League. However, this estimate for the Social Security 2025 COLA is even more pessimistic. The increase for retirement and SSDI benefits will be about 1.8%.
SOCIAL SECURITY RECIPIENTS LOSE BUYING POWER OVER TIME
There could be a double disappointment among retirees and people on disability benefits. Apart from receiving a lower COLA from the Admnistration, there will also be a loss of buying power.
The Senior Citizen League published a report in 2023 that stated that seniors on Social Security have lost 36 percent of their buying power since 2000. That means a person on retirement or disability benefits can buy fewer things than 24 years ago.
In case you did not know, the average COLA for the last 2 decades has been about 2.6%. Hence, both estimates are lower than that figure. Undoubtedly, this could be another reason to be unhappy with the 2025 COLA boost.