The inflation data for August gives us a pretty good idea about the likely magnitude of Social Security’s cost-of-living adjustment (COLA) for 2025. This automatic indexing of benefits to keep up with rising prices — always a wonderful feature of our Social Security program — has been particularly valuable in light of the recent bout of inflation.

You can likely expect a raise next year, but it may not go as far as you expect.

The COLA has been up and down over the last few years as it was 3.2% in 2023, 8.7% in 2022, 5.9% in 2021 and 1.3% in 2020. The Social Security Administration is expected to announce the official COLA for 2025 in mid-October.

Social Security COLAs are tied directly to inflation. Therefore, when one goes down, it indicates that the other is down, too. In other words, a smaller 2025 COLA means inflation has been cooling. If that trend continues, seniors on Social Security could gain buying power in the form of lower prices in stores and in general.