The 2025 Social Security Cost-of-Living Adjustment (COLA) Forecast Just Changed, and It Could Pleasantly Surprise Many Retirees
What is the Federal Open Market Committee's inflation goal?
The Federal Open Market Committee's (FOMC) inflation goal is to maintain a 2% inflation rate over the longer run, as measured by the annual change in the price index for personal consumption expenditures1. This target is considered most consistent with the Federal Reserve's mandate for maximum employment and price stability.
What was the CPI increase percentage year over year as of May?
The Consumer Price Index (CPI) for All Urban Consumers increased by 3.3% year over year as of May, according to the U.S. Bureau of Labor Statistics. This is a slight decrease from the previous year's increase of 3.4%.
What is the expected COLA increase for next year?
The expected COLA increase for next year is 2.57%, according to The Senior Citizens League's forecast. This is down from the previous outlook of 2.66% and significantly lower than the 3.20% COLA received this year. A lower COLA could be beneficial for retirees, as it indicates lower inflation and potentially increased purchasing power of Social Security checks.