Social Security COLA Estimate for 2025 Climbs Again to 3.2%

The index for shelter rose in April, as did the index for gasoline. Combined, these two indexes contributed over 70% of the monthly increase in the index for all items. The energy index rose 1.1% over the month, but the food index was unchanged in April. The food at home index actually declined 0.2%, while the food away from home index rose 0.3% over the month.

Social Security COLA and Medicare Costs

Johnson’s analysis also points out that the Medicare trustees have estimated that the standard Part B premium for 2025 will increase at nearly double the rate of the currently projected Social Security COLA. Specifically, on page 198 of the recent 2024 annual report, the trustees estimate the Part B premium will climb 5.9% per month in 2025, from $174.70 in 2024 to $185.00.

Johnson said the annual cost-of-living adjustment does not factor in any increase in the Medicare Part B premium, because COLAs are based on a consumer price index for working adults, i.e., the CPI-W.

“The CPI-W, in fact, excludes the spending patterns of retired and disabled adults ages 62 up — most people receiving Medicare benefits,” Johnson said. “Nevertheless, Part B premiums are one of the fastest growing costs in retirement, and those premiums are deducted directly from Social Security benefits.”

Credit: David Palmer/ALM