What's Happening
16 minutes ago

Asia Ex-India And Europe Markets Advance, Gold Retreats From All Time High - Global Markets Today While US Slept

benzingabenzinga.com
17 minutes ago

Want $10,000? Invest $2,500 Into XRP (Ripple) and Wait 4 Years.

foolfool.com
19 minutes ago

Lyft CEO Sees Autonomous Vehicles Including Alphabet's Waymo As Game-Changer For Ride-Hailing, Not A Threat: 'The More AVs… The Better Lyft Does'

benzingabenzinga.com
22 minutes ago

Buying This Artificial Intelligence (AI) Chip Stock Is a No-Brainer After This Development

foolfool.com
22 minutes ago

Looking for Dividend Stocks to Buy in February? Consider These 3 Dow Jones Components.

foolfool.com
37 minutes ago

1 Must-See Quote for AI Stock Investors From Arm Holdings' CEO

foolfool.com
44 minutes ago

Could Dogecoin Make You a Millionaire in 2025?

foolfool.com
45 minutes ago

This Stock Could More Than Double By 2029, According to Billionaire Bill Ackman

foolfool.com
47 minutes ago

Intel Just Pulled Ahead in This Key Market

foolfool.com
52 minutes ago

Did China's DeepSeek Just Crash and Burn President Trump's $500 Billion AI Stargate Project?

foolfool.com
54 minutes ago

US Stocks Set For A Cautious Start Ahead Of Inflation Data: Expert Says 'Strong Bull Markets Tend To Roar Back To Life After Corrections'

benzingabenzinga.com
57 minutes ago

Got $3,000? 3 Artificial Intelligence (AI) Stocks to Buy and Hold for the Long Term

foolfool.com
1 hour ago

2 Stocks Down 47% and 82% to Buy Right Now

foolfool.com
1 hour ago

What's a Fair Price to Buy Johnson & Johnson Stock?

foolfool.com
1 hour ago

Is Berkshire Hathaway Stock a Buy Now?

foolfool.com
1 hour ago

Is Archer Aviation Stock Worth the Hype?

foolfool.com
1 hour ago

'Racism Has No Place in Missouri': State Attorney General Sues Starbucks Over Hiring Policies

benzingabenzinga.com
1 hour ago

Geopolitics And Resource Nationalism Are Choking The Commodity Supply

benzingabenzinga.com
1 hour ago

Should You Buy Affirm While It's Below $85?

foolfool.com
1 hour ago

Should You Buy Bank of America While It's Below $50?

foolfool.com

There’s Good News and Bad News About 2025’s Social Security COLA

You’ll generally hear that the monthly Social Security benefit you lock in based on your filing age will be the same amount you collect for life. For this reason, it’s important to sign up at the right time.

But the truth is that your monthly benefit is never truly locked in, because each year, Social Security recipients are eligible for an automatic cost-of-living adjustment (COLA). So you might, for example, start out with a monthly benefit of $2,000, only to see it increase to $2,050 the next year, $2,120 the year after that, and so forth.

A person at a laptop  holding documents.

Image source: Getty Images.

In 2025, Social Security benefits are eligible for a 2.5% COLA. But unfortunately, most recipients aren’t exactly jumping for joy over that news.

A 2.5% COLA is the smallest Social Security increase to arrive in years. So it’s natural that seniors aren’t thrilled about it. But while you may be inclined to think of a 2.5% COLA as a bad thing, there’s a silver lining you should know about.

A tough blow for seniors

By itself, Social Security’s 2025 COLA isn’t terrible. A 2.5% raise is by no means the smallest increase benefits have ever seen.

What’s making matters a bit worse is that the cost of Medicare Part B is rising substantially in 2025. Seniors enrolled in both Social Security and Medicare have their monthly Part B premiums deducted from their benefits off the bat. A roughly $10 increase in the cost of Part B will leave many seniors with even less money in their pockets after all is said and done.

Don’t despair

You may not love the idea of your monthly Social Security checks only rising by 2.5% at a time when Medicare is going to cost you more. But one thing to remember is that Social Security COLAs are directly tied to inflation. So a less generous COLA in 2025 is a clear indication that the pace of inflation is slowing down.

Now, one misconception about cooling inflation is that it means that goods and services are getting cheaper. That’s not necessarily the case.

Rather, what it means is that the cost of goods and services is increasing at a slower pace than what we’ve seen in recent years. And that could mean a world of financial relief.

In 2022 and 2023, many seniors on Social Security struggled to keep up with surging bills. In 2025, costs are expected to rise at a much slower pace. This means that even with just a 2.5% COLA, Social Security recipients may not end up losing out on so much buying power.

Put another way, at the start of 2024, Social Security beneficiaries got a 3.2% COLA. But inflation was also higher going into 2024 than it is going into 2025. So all told, a 2.5% COLA in 2025 might have the same buying power as a 3.2% raise in 2024.

In fact, that’s the thing about COLAs: They’re not designed to help seniors get ahead of inflation. Their goal is to merely keep up with it.

A 2.5% Social Security raise in 2025 is poised to do just that. And when you think about it in this light, that’s not really something to get upset about.

The $22,924 Social Security bonus most retirees completely overlook

If you’re like most Americans, you’re a few years (or more) behind on your retirement savings. But a handful of little-known “Social Security secrets” could help ensure a boost in your retirement income. For example: one easy trick could pay you as much as $22,924 more… each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we’re all after. Simply click here to discover how to learn more about these strategies.

View the “Social Security secrets” »

The Motley Fool has a disclosure policy.

Related Posts

So you have $100,000 and you want to build it into $1 million by retirement. That’s great! Even if you have less — perhaps a

Okay, folks. It’s time to get serious about Social Security. I don’t like to be the person who sounds alarms and causes unnecessary panic. But

Image source: Getty Images The best credit cards have a lot of perks — cash back, travel rewards, purchase protection, and more. But what happens

Social Security benefits for spouses are a common source of confusion. MassMutual reports that 25% of surveyed adults near retirement age were unaware that spouses