The Social Security Cost-of-Living Adjustment (COLA) Forecast for 2025 Exposes a Flaw That May Shock Retirees
Social Security benefits got a 3.2% cost-of-living adjustment (COLA) in 2024, a smaller raise than the historic 8.7% COLA doled out in 2023. Unfortunately, retired workers are on pace to get an even smaller pay bump of 2.6% in 2025, according to The Senior Citizens League, a non-profit advocacy group.
What makes that steady decline surprising is that many seniors report facing financial hardships. The 2023 Retirement Confidence Survey (RCS) conducted by the Employee Benefit Research Institute reported that "58% of retirees are concerned they will have to make substantial cuts to their spending due to inflation."
That number ticked down to 56% this year, but the trend is still intact. In fact, the 2024 RCS found that 26% of retirees lack confidence in their ability to finance retirement, and inflation is the most common reason for that lack of confidence. Those statistics beg the question: Are Social Security benefits actually keeping pace with inflation?
Source Fool.com
