Social Security Cost-of-Living Adjustment Announcement Expected Thursday

Tens of millions of Social Security recipients are eagerly awaiting Thursday’s announcement of the cost-of-living adjustment (COLA) for 2025. The COLA, which is determined by the rate of inflation, helps ensure that Social Security benefits keep pace with rising prices.

Analysts predict that the 2025 COLA will be around 2.5%, a smaller increase than the 3.2% adjustment in 2024 and the historically large 8.7% boost in 2023, which was driven by a surge in inflation to a 40-year high.

The projected smaller increase for 2025 reflects the moderation of inflation in recent months. However, some retirees are expressing concern that the COLA will not be sufficient to offset the rising costs of living, especially for those on fixed incomes.

The Social Security program, which provides benefits to over 70 million Americans, faces a long-term funding shortfall due to an aging population and a shrinking workforce. The program’s trust fund is projected to be depleted by 2035, after which the government would only be able to pay 83% of scheduled benefits.

Addressing this looming crisis has become a key issue in the upcoming presidential election. Kamala Harris, the Democratic nominee, has proposed addressing the funding shortfall by raising taxes on wealthy individuals and corporations. Donald Trump, the Republican nominee, has pledged not to cut Social Security benefits or raise the retirement age, while advocating for tax cuts for seniors.

Key Takeaways:

• The Social Security Administration will announce the 2025 COLA on Thursday.
• Analysts predict a smaller increase of around 2.5% compared to recent years, reflecting moderating inflation.
• The Social Security program faces a long-term funding shortfall, which has become a key issue in the presidential election.
• Both presidential candidates have proposed solutions to address the program’s financial challenges.

The 2025 COLA announcement will be closely watched by Social Security recipients and policymakers, as it will have a significant impact on the financial well-being of millions of Americans and the long-term sustainability of the program. The upcoming election could also determine the direction of Social Security policy and the approaches taken to address the program’s financial challenges.