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Time to think about next year’s Social Security COLA. - The Motley Fool
We’re still about two months away from an official announcement, but the media airwaves are popping with estimates of what next year’s adjustment will be. Some projections put the increase at 2.5%, others leaning toward 2.6% or 2.7%, but it’s all just guesswork at this point. Given the current economic turmoil and the impact of changes like tariffs on prices, it’s uncertain what the outcome will be.
But despite the variables, there really is a system to the determination of cost-of-living adjustments. The Motley Fool’s Maurie Backman, via a post on their website, explains some of the key fundamentals and some of the history of this intriguing process. For a more complete understanding of COLA, click here to read this post.
Also, in case you/re wondering, the 2024 calculation adjustment (2.5% applied in January 2025) was just about on average for the years since 2000. In the period 2000-2024, COLA averaged 2.584%, despite several zero years and a whopping 8.7% in 2022. Incidentally, since automatic COLAs began in 1975, the average has been 3.7%.
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