Millions of seniors depend on Social Security as their primary source of income during retirement. According to a 2023 report from the Nationwide Retirement Institute, about 1 in 5 adults over age 50 have no other retirement income outside of their benefits. For these individuals, the annual cost-of-living adjustment (COLA) is crucial for maintaining their standard of living.

The COLA is designed to help Social Security benefits keep pace with inflation. In 2024, the COLA was set at 3.2%, increasing the average retired worker’s benefit from $1,848 per month to $1,907 per month. This adjustment is based on third-quarter inflation data, with the Social Security Administration (SSA) making its official announcement each October after the September inflation report.

As we look ahead to 2025, some experts have started forecasting next year’s COLA. According to analysts at The Senior Citizens League, the COLA for 2025 could be around 2.6%. This would be lower than the 2024 adjustment and the lowest COLA since 2021.

The reduced COLA is a concern for many seniors, especially given the current economic climate. With record inflation levels, often referred to as “Bidenflation,” many are questioning whether the administration is doing enough to support those living on fixed incomes.

For seniors relying heavily on Social Security, understanding these adjustments is critical. The annual COLA helps ensure that benefits do not lose their purchasing power, but with a potentially lower increase in 2025, many may need to find additional ways to supplement their income to cope with rising costs.