Social Security's 2025 Cost-of-Living Adjustment (COLA) Is on Track to Yield an Unpleasant Surprise
Article Excerpt: "There's more to Social Security's cost-of-living adjustment (COLA) than meets the eye. ...In March, the nearly 50.7 million retired workers who collected a Social Security benefit took home an average of $1,913.31. Though this might not sound like much...the SSA doesn't rely on a full year's worth of CPI-W readings to calculate its annual COLA. Rather, only readings from the third quarter (July through September) factor into the calculation. If the average CPI-W reading in the third quarter of the current year increases from the average CPI-W reading in the third quarter of the previous year, inflation has occurred, and Social Security beneficiaries are due a larger payout in the upcoming year. The amount that payouts rise is determined by the year-over-year percentage increase in the average third-quarter CPI-W, rounded to the nearest tenth of a percent. ...Based on the $1,913.31 that the average retired-worker beneficiary took home in March, a 2.6% cost-of-living adjustment would increase benefits by nearly $50 per month next year."
Resource: www.fool.com