2025 Social Security COLA May Disappoint Retirees Despite Potential Increase

The 2025 Social Security COLA could be bigger than the 2024 COLA of 3.2%. However, this isn't necessarily good news for retirees.

A larger COLA doesn't keep up with rising inflation that retirees face before the increase takes effect. Retirees lose purchasing power due to the time lag.

The COLA formula doesn't fully account for rising healthcare costs that disproportionately impact retirees. So real buying power still decreases.

71% of retirees surveyed said their household costs rose more than the 2024 COLA amount over the past year.

Estimates show the 2025 COLA could be 2.6%, still below the 2024 COLA. So retirees shouldn't bank on a significantly higher increase yet.