Social Security Increase for 2025 Projected at 2.63 Percent, Lowest Hike in 3 Years

A Social Security Administration site in Garden Grove, Calif., on Feb. 19, 2021. John Fredricks/The Epoch Times

The cost-of-living adjustments (COLA) for Social Security recipients next year won’t exceed 3 percent and could place more stress on beneficiaries struggling with high food costs, according to The Senior Citizens League (TSCL).

“The 2025 COLA prediction is about 2.63 percent, up from 2.57 percent last month,” Alex Moore, TSCL social security and Medicare statistician, said in a July 11 press release.

If the prediction turns out to be true, this would be the lowest COLA bump since 2021. The new COLA projection was made after recent data showed that June inflation fell to 3 percent from 3.3 percent in May. “Although easing inflation should relieve older consumers, the rapidly increasing price of groceries the 2020s have seen thus far means financial relief is still far away,” TSCL said.

“From 2020 to 2023, the cost of the average grocery item with direct prices tracked by the CPI [Consumer Price Index] has risen by 24 percent. While eggs captured many headlines with a rise of 86 percent, many other key items, such as coffee, sugar, bread, and ham saw their cost increase by more than a third.”

Between January 2020 and December 2023, CPI-W, a measure of inflation used to calculate official COLA adjustments, surged by 19.6 percent. In response, Social Security COLA adjustments jumped by 19.1 percent.

TSCL’s 2024 senior survey showed that 34 percent of U.S. retirees applied for food stamps or visited a food pantry over the past 12 months.

In addition, 60 percent cited food as the “fastest-growing expense” in their household budgets, more than double the next highest expense category, housing.

Last month, TSCL pointed out that COLAs have become “less and less likely to keep up with inflation over time.”

“Just one of the five COLAs implemented so far in the 2020s (20 percent) has outpaced inflation, compared to 40 percent in the 2010s and 60 percent in the 2000s and 1990s.”

When COLA adjustments become insufficient, it leaves financially vulnerable seniors short of thousands of dollars in Social Security receipts.

The concerns about inflation eroding living standards have heightened in an election year where rising prices remains a key issue.

Republicans have blamed President Joe Biden’s policies for the inflationary pressure faced by American families.

Senator Mitch McConnell (R-Ky.), for example, said Americans are “paying significantly higher prices” for everything from food to housing and transportation since President Biden took office.

Meanwhile, the president recently released a statement defending his policies after the June inflation data were released.

“Prices are falling for cars, appliances, and airfares, and grocery prices have fallen since the beginning of the year. Thanks to my economic plan, wages are rising faster than prices, we’ve created 15.7 million jobs, and communities that were left behind by my predecessor are making ‘a remarkable comeback,’” President Biden said.

He called on big corporations making “record profits” to do more to lower prices.