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COLA Watch – How the 2025 Adjustment is Shaping Up
We’re in the closing stages of the calculation window to determine next year’s Social Security cost-of-living adjustment (COLA), and many seniors are looking forward to the final announcement in October. In the run-up to that point, there has been steady commentary suggesting a substantial drop in the three prior-year adjustments, which have averaged just under 6%. That’s not surprising since the basis for the measurement continues to be the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). This factor has become controversial over the past few years since, as noted by The Motley Fool’s Johnny Rice, it “is designed to track the habits of people who are younger and still working. Retirees have different needs and spending priorities. Perhaps the most glaring difference is medical care. This is comparatively a much larger part of a retiree’s budget and an area of the economy that often sees higher-than-average inflation.”
The Senior Citizens League (TSCL) has consistently weighed in on this matter, suggesting that the inadequacy of the measurement has led to seniors losing “20% of their Social Security benefit buying power since 2010.” The issue will likely continue to be debated in the years ahead, especially as Congressional attention is focused on Social Security’s looming insolvency and the need for overall reform. In the meantime, Rice’s post will give you some good background on COLA and its calculation process…check it out here.