Social Security's 2025 bump is projected to be the smallest in 5 years

• Social Security's 2025 cost-of-living adjustment is projected to be 2.66%, below inflation.
• The 2024 COLA was 3.2%, and 71% of older Americans found it insufficient for rising bills.

The impact of inflation is now projected to get even worse for millions of older adults in the US.

The Senior Citizens League's latest projection forecasts Social Security's 2025 cost-of-living adjustment (COLA) to be just 2.66%, the lowest increase since before the pandemic. That is below the level of inflation, which has hovered around 3.5% in recent months.

The COLA for Social Security benefits was 3.2% in 2024. According to an ongoing survey by The Senior Citizens League, 71% of older Americans did not think this year's increase was enough to cover their rising bills at the time of publication.

"With the forecast of a 2.66% COLA for 2025, it appears seniors will continue to suffer financial insecurity as much next year as they have this year," said Shannon Benton, executive director of The Senior Citizens League.

According to the Social Security Administration, the average monthly benefit in 2024 is $1,907, up about $50 from 2023. According to Benton, the net benefit increase was just $40.20 after the cost of Medicare rose by $9.80 each month.

Meanwhile, according to The Senior Citizen League's survey, 43% of respondents said their monthly expenses had increased by at least $185 a month in 2023 compared to the previous year.

Social Security recipients typically receive an increase in their benefits in January to compensate for the rising cost of living. The exact amount is based on the level of inflation observed in The Bureau of Labor Statistics' consumer price index (CPI) from July through September of the previous year.

The cost-of-living increase can vary wildly each year. In 2020, the final adjustment based on pre-pandemic inflation, the COLA was 1.3%. In 2022, the increase was 8.7%.

Over 67 million Americans receive Social Security, and an increase is not guaranteed. Since the COLA was added to Social Security benefits in 1975, there have been three years without a bump in the monthly checks.

Like many Americans, the cost of food appears to be one area of inflation that is hitting older adults the hardest. In The Senior Citizen League's survey, 61% of respondents said food was the expense that increased the most.

According to the USDA, their recommended food budget has increased by 27% since 2020. This is one of the biggest reasons Americans still don't feel good about the economy.