Social Security COLA 2025: What GA Residents Can Expect

According to new government estimates, Social Security’s cost-of-living increase would be about 2.6 percent. Here’s what that means in Georgia.

May 21, 2024, 12:10 p.m. EDT

GEORGIA — A projected cost of living increase of 3.2 percent by 2025 for about 71 million Social Security beneficiaries, including about 250,000 people in Georgia, may not be enough to keep pace with the inflation, according to defenders.

The federal government won’t make a decision on the COLA, as the cost of living adjustment is called, until October. Current government estimates put the COLA at about 2.6 percent, as it had been for about 20 years before last year’s 3.2 percent increase. The final amount depends on inflation.

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Mary Johnson, an independent Social Security and Medicare analyst who previously worked for the nonprofit Senior Citizens League, estimates that the COLA will fall by about 3.2 percent. She revised her forecast after April inflation data showed consumer prices were 3.4 percent higher than a year earlier, but down slightly from the rate of inflation of 3.5 percent in March.

Johnson told MarketWatch that even as inflation cools from its two-decade highs, all consumers still feel less purchasing power. But increases in some sectors — including housing, up 5.5 percent, electricity, up 5.1 percent, and medical care, up 2.7 percent — hit harder on older people, Johnson said.

Even with the increase in benefits in 2024, the purchasing power of older Americans has increased only marginally.

In a statement, Shannon Benton, executive director of the Senior Action League, said the 2024 increase only marginally increased the purchasing power of older Americans. The average benefit increased by about $50, “and after subtracting $9.80 to cover increases in Medicare Part B premiums, the total change in benefits came to just $40.20 per month.”

Unless the adjustment is increased, “it appears that seniors will continue to experience financial insecurity as much next year as this year,” Benton said.

“Even though COLA payments will increase to offset the effects of inflation, the problem many have with the potential percentage increase is that it will not be enough to meet most seniors’ financial needs,” said Alex Beene, financial literacy instructor at the University of Toronto. University of Tennessee at Martin, told Newsweek.

“Clearly,” he said, “daily expenses for this age group continue to rise, but rising health care costs are putting additional pressure on these individuals, and COLA payments could not be sufficient to match this increase.”

About 71 percent of older Americans who responded to a 2024 survey by the Senior Action League said household costs outweighed the 3.2 percent increase in benefits.

“The majority of seniors still feel like their costs are increasing faster than these annual adjustments,” Michael Ryan, financial expert and founder and CEO of michaelryanmoney.com, told Newsweek. “So while the COLA is certainly helpful, it often does not fully cover the real inflation that depletes seniors’ purchasing power.”

According to AARP, 40 percent of Americans 65 and older rely on Social Security for half of their income, and about 14 percent of them rely on benefits for 90 percent of their income.