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The 2025 COLA’s Here, But There’s Continued Disappointment
An uptick in the inflation rate since the determination of 2025’s Social Security cost-of-living adjustment (COLA) indicates that the 2.5% benefit increase may have underestimated the growth in prices facing Americans last year. The Motley Fool’s Trevor Jennewine offers conjecture on what the back-to-back increase in CPI-W in the months following 2024’s third quarter will likely mean for consumers already experiencing a substantial loss of purchasing power.
Although Jennewine notes that higher interest rates could offer a slight compensation for the lower COLA, another point–minor, perhaps–is the simple fact that, while small, the 2.5% increase could shift some beneficiaries above the threshold for income taxation of their benefits, while other already above the thresholds will also face additional loss of net benefits.
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