Social Security COLAs are tied directly to inflation. Therefore, when one goes down, it indicates that the other is down, too. In other words, a smaller 2025 COLA means inflation has been cooling. If that trend continues, seniors on Social Security could gain buying power in the form of lower prices in stores and in general.

The inflation data for August gives us a pretty good idea about the likely magnitude of Social Security’s cost-of-living adjustment (COLA) for 2025. This automatic indexing of benefits to keep up with rising prices — always a wonderful feature of our Social Security program — has been particularly valuable in light of the recent bout of inflation.

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While the official COLA will be announced next month, experts following inflation trends month to month can make fairly accurate predictions for what the adjustment will look like

The COLA has been up and down over the last few years as it was 3.2% in 2023, 8.7% in 2022, 5.9% in 2021 and 1.3% in 2020. The Social Security Administration is expected to announce the official COLA for 2025 in mid-October.

The next cost-of-living increase for Social Security recipients — which was already projected to be the lowest in years — is continuing to fall even lower, according to the latest figures from the Labor Department.

Data source: Social Security Administration. You see that they can get quite high or be quite low. The average COLA over the past two decades or so has been about 2.6%.

Social Security recipients received a 3.2% COLA in 2024, a significant decrease from the 8.7% COLA in 2023, which was the largest increase in four decades. For 2025, using current inflation data from the Consumer Price Index, it’s estimated there will be a 2.5% COLA in 2025, according to The Senior Citizens League (TSCL).