Inflation is back to running a bit hot. And while that is bad news for shoppers, it might offer a silver lining to Social Security recipients.
The Social Security cost-of-living adjustment — or “COLA” — is now expected to be 2.6% in 2025, according to a new forecast by The Senior Citizens League.
On Wednesday, the federal government announced that the Consumer Price Index for All Urban Consumers came in at 3.5% year over year, and 0.4% month over month.
The CPI number was higher than expected, and marked the third straight month that inflation was elevated. The year-over-year inflation figure is now the highest it’s been in six months.
Higher inflation translates into an increased COLA. As new inflation data comes in each month, the league responds by readjusting its COLA forecast higher or lower.
The league notes that the federal government will base the actual COLA on the average inflation rate during the third quarter of this year, which will then be compared to the same period from one year ago.
As the league says in a summary of its analysis: “Six months’ worth of data still needs to be collected, leaving plenty of room for change.”
Although inflation is sharply down from its highs of a couple of years ago, consumers are still feeling the pinch as prices rise from month to month.
The league’s 2024 Senior Survey of 1,157 consumers found that last year, 43% saw their monthly expenses jump by more than $185. Nearly two-thirds — 61% — said food is the place where their costs are rising the most.
More than half of survey respondents — 53% — say they have spent their emergency savings in this time of rising prices.
If your costs are spiraling out of control, check out the “10 Sure-Fire Ways to Beat Inflation.”
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