2025 COLA Could Be 1.75%

2025 COLA Could Be 1.75%

The January CPI-W (Consumer Price Index for Urban Wage Earners and Clerical Workers) came in at 2.9%.  That’s higher than the inflation trends indicated last month based on December CPI-W data.  Based on this trend, The Senior Citizens League (TSCL) is adjusting the long-term forecast COLA to 1.75% in 2025.

According to TSCL’s 2024 Senior Survey, 73% said their household costs rose by more than 3.2% in 2023, and 38% worry that their 2024 COLA will fall short of inflation this year.

TSCL COLA estimates tend to CHANGE month to month based on the most recent CPI data.  This is the forecast based on data through January 2024 that was released today, and the final COLA for 2025 is likely to be different from the estimates because the COLA is calculated on the average rate of inflation during the 3rd quarter (JUL, AUG, and SEP) which is compared against the 3rd quarter a year ago.  In other words, there are another eight months of data to come in, and a lot could change.

How does our estimate compare with others?

The Congressional Budget Office recently released the annual Budget and Economic Outlook for 2024 to 2034.

The URL below links to the CBO's estimate of the 2025 COLA. Look for Key Assumptions. Then, see the column for 2024. The estimate is 2.5% (see footnote b. COLA payable in January of the following calendar year).

The CBO uses a different methodology than TSCL’s, but clearly, inflation rates are expected to fall from 2023 levels, and the COLA for 2025 will also be lower.


Please feel free to contact Shannon Benton for new survey findings on the COLA!