For Immediate Release:
October 10, 2024
Cost-of-Living Adjustment for 2025 Announced at 2.5%
The Social Security Administration announced that 2025’s COLA will be 2.5 percent on October 10. On average, retired workers’ Social Security checks will increase by an estimated $48 on January 1, from $1,920 to $1,968.
Inflation cooled rapidly in the third quarter of 2024 when the government averaged the Consumer Price Index for Urban Wage Earners (CPI-W) to calculate the COLA. After hovering near or above 3 percent for most of the year, the CPI-W came in at 2.9 percent for July and 2.4 percent for August. Today, the Bureau of Labor Statistics announced that the CPI-W for September was 2.2 percent.
Key Insights:
- TSCL has expected this cooling inflation—and a disappointing COLA—since the beginning of the year. Our predictive model’s final prediction before the COLA announcement, 2.5 percent, was the exact same as the final COLA. The model anticipated that the COLA would fall between 2.5 and 2.7 percent throughout the year, even as far back as March, when the February CPI-W figure came in at 3.5 percent.
- Seniors are frustrated that the CPI-W fails to measure inflation as they experience it. In a recent TSCL survey of more than 3,000 older Americans, 72 percent said that changing the COLA calculation to an index that better reflects seniors’ changing costs should be a top priority for Congress. Additionally, 70 percent said they worry that persistently high inflation prices will cause them to raise their spending and risk depleting their retirement savings and other assets.
TSCL Executive Director Shannon Benton Says:
- “This year represents another lost opportunity to grant seniors the financial relief they deserve by changing the COLA calculation from the CPI-W to the CPI-E, which would better reflect seniors’ changing expenses.”
- “Seniors—and TSCL—demand that Congress takes immediate action to strengthen COLAs to ensure Americans can retire with dignity, such as instituting a minimum COLA of 3 percent and changing the COLA calculation from the CPI-W to the CPI-E.”
- “Our research shows that 67 percent of seniors depend on Social Security for more than half their income and that 62 percent worry their retirement income won’t even cover essentials like groceries and medical bills.”
About the TSCL COLA Model:
TSCL issues a new prediction of the next COLA for Social Security each month using our statistical model. Our model incorporates the Consumer Price Index, the Federal Reserve interest rate, and the national unemployment rate to make its predictions. The model’s predictions update throughout the year, adjusting in response to economic conditions. For additional information about the model, contact Alex Moore, TSCL’s statistician, at amoore@tsclhq.org.
About TSCL:
The Senior Citizen’s League (TSCL) is one of the nation’s largest nonpartisan seniors’ groups. Established in 1992 as a special project of The Retired Enlisted Association, our mission is to promote and assist our members and supporters, educate and alert senior citizens about their rights and freedoms as U.S. citizens, and protect and defend the benefits seniors have earned and paid for. TSCL consists of vocally active senior citizens concerned about the protection of their Social Security, Medicare, and veteran or military retiree benefits. To learn more, visit https://seniorsleague.org/about-us/.
