Welcome to Extreme Investor Network, where we provide you with insightful information on personal finance to help you make the most of your money. Today, we’re diving into the recent announcement from the Social Security Administration regarding the cost-of-living adjustment for 2025.
The Social Security Administration recently declared that the cost-of-living adjustment for 2025 will be 2.5%. While this may seem like a positive increase, it is actually the lowest adjustment beneficiaries have seen since 2021 when the adjustment was only 1.3%. The purpose of the COLA is to ensure that benefits keep up with inflation, which is calculated based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).
As government data shows a decrease in the pace of inflation, the annual increase to benefits has also declined. This year’s adjustment may not be the lowest historically, but it comes at a challenging time for retirees and beneficiaries facing high costs.
Experts are debating the best measurement for the COLA, with some advocating for the use of the Consumer Price Index for the Elderly (CPI-E) to better reflect seniors’ spending patterns. While the AARP and other senior advocacy groups support this change, there are differing opinions on whether the CPI-E is the most appropriate measure for all beneficiaries.
At Extreme Investor Network, we understand the importance of staying informed about changes that impact your financial well-being. Be sure to check back for more updates and insights on personal finance topics to help you navigate the ever-changing landscape of money management.