Retirees relying on Social Security benefits can expect the lowest cost-of-living (COLA) increase since 2021. The latest COLA forecast is 2.5%, a slight decrease from last month’s estimate of 2.6%, as inflation continues to cool. The new prediction for the 2025 COLA, which comes from Kiplinger’s chief economist David Payne, is based on the inflation numbers released by the Bureau of Labor Statistics on Wednesday.
The average retiree benefit is about $1,870 each month, which means a COLA of 2.5% would translate into an increase of about $47 per month or $564 annually. This modest increase will make it difficult for seniors to keep up with the continued rising costs of energy, clothes, transportation and shelter that are responsible for driving the current inflation rate, according to Kip's investing expert Dan Burrows.
