SSA Announces 2.5% COLA for 2025

The Social Security Administration (SSA) has announced a 2.5% cost-of-living adjustment (COLA) for 2025, marking the smallest increase since 2021. This adjustment impacts approximately 68 million Social Security beneficiaries and 7.5 million Supplemental Security Income (SSI) recipients, with average monthly benefits rising by about $50. The adjustment aims to offset inflation, but many retirees argue it fails to meet their financial needs, as the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) used for calculations does not accurately reflect retirees' expenses, particularly in healthcare. Analysts note that while inflation has cooled, the COLA's modest increase could erode retirees' purchasing power further. Advocacy groups like the Senior Citizens League highlight that benefits have lost significant purchasing power since 2010, and the COLA may continue to lag behind actual inflation rates. Despite the challenges, the SSA's COLA is seen as a necessary mechanism to maintain financial stability for retirees amid fluctuating economic conditions.