Social Security increase: Latest COLA projections are out and it’s not good news

The latest projection for 2025′s Social Security increase is up slightly from last month’s figure but is likely still bad news for millions of recipients.

The non-partisan Senior Citizens League Cost of Living Adjustment projection rose to 2.64%, up from the 2.57% forecast last month. The change was due to the rate of inflation as measured by the Consumer Project Index used to calculate the increase, which fell to 3%. COLA estimates change monthly based on the latest CPI data. The final amount for 2025 will likely differ from the estimates because it’s computed based on the average inflation rate during the third quarter – July, August, and September – and then compared to the same period a year prior.

Why the projection is not good news

Alex Moore, TSCL Social Security and Medicare statistician and managing partner at Blacksmith Professional Services, said while easing inflation will be a relief to some older consumers, the rapidly increasing price of groceries means that for many, financial relief is still far away.

From 2020 to 2023, the cost of the average grocery item with direct prices tracked by the CPI has risen 24%. The list includes many of the most common consumer foods, such as eggs – which rose by a whopping 86% during that time – to items such as coffee, sugar, bread and ham, where costs increase by more than a third.

“Rising grocery prices are creating food insecurity for many retirees. Feeding America estimated that 5.5 million Americans age 60 and above suffered from food insecurity in 2021, in the most recent study available on the subject, and that number is likely higher today,” Moore said in a statement.

TSCL’s 2024 Senior Survey of more than 1,550 respondents showed 34% of retirees said they’ve visited a food pantry or applied for food stamps over the last 12 months. Sixty percent said food was their fastest-growing expense in their monthly budgets, more than double the next hardest-hit expense category, housing.