Social Security recipients can expect a “substantially lower” Cost of Living Increase in 2025, the latest projections show.

The new forecast predicts an increase of about 2.57%, down from 2.66% last month, according to Alex Moore, The Senior Citizens League’s Social Security and Medicare statistician and managing partner at Blacksmith Professional Services.

COLAs are determined by data from the Consumer Price Index for Urban Wage Earners and Clerical Worker’s tracking of the average price of a basket of goods. To determine the amount, the average CPI-W for the third quarter of the previous year – July, August and September – is compared to the third quarter of the current year. The final COLA amount for 2025 will be announced in October and go into effect in January 2025.

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Moore said the falling COLA predictions are a bad sign for seniors, noting even last year’s higher increase didn’t keep up with real-life expenses due to high inflation.. Among the roughly 1,550 participants in TSCL’s 2024 Senior Survey, 69% said their household costs outran the COLA last year, with costs for food and housing leading the way.

“The fact is that COLAs have become less and less likely to keep up with inflation over time. Just one of the five COLAs implemented so far in the 2020s (20%) has outpaced inflation, compared to 40% in the 2010s and 60% in the 2000s and 1990s,” Moore said.

The same survey found that half of retirees have dipped into emergency savings over the last year, while a third have visited a food pantry or applied for Supplemental Nutrition Assistance Program, or SNAP benefits. A quarter have depleted a retirement or savings account to zero.