The estimated cost-of-living adjustment for Social Security in 2025 is projected to decrease as inflation decreases.

• According to a new estimate based on government inflation data released on Thursday, the Social Security cost-of-living adjustment may be 2.7% next year.
• Despite the slowing pace of inflation, retirees and Social Security beneficiaries still face rising expenses.
• The estimated cost of living adjustment (COLA) for Social Security in 2025 is not yet final and may be subject to revision.

The decrease in inflation's pace suggests that retirees and other beneficiaries may receive a lower Social Security cost-of-living adjustment in 2025.

According to an estimate from Mary Johnson, an independent Social Security and Medicare policy analyst, the Social Security cost-of-living adjustment, or COLA, may be 2.7% next year, based on new government data released on Thursday.

The Consumer Price Index, which measures inflation by tracking the average change in prices paid by consumers on a basket of goods and services, reached its lowest 12-month rate in more than three years based on June data.

The Bureau of Labor Statistics reports that the CPI-W for June increased by 2.9% compared to the previous 12 months. Social Security benefits are adjusted annually based on this subset of the CPI.

The COLA estimate for 2024 has decreased from Johnson's earlier prediction of a 3% increase based on May CPI data.

Here are five strategies to help build a better budget: 1. Track your expenses: Keep a record of all your expenses for at least a month to understand where your money is going. 2. Set realistic goals: Determine what you want to achieve financially and set realistic goals that align with your income and spending habits. 3. Create a budget plan: Develop a budget plan that includes all your income and expenses, and allocate funds for each category based on your priorities. 4. Stick to your budget: Follow your budget plan as closely as possible and make adjustments as needed to stay on track. 5. Review and adjust: Regularly review your budget and make adjustments as necessary to ensure you are meeting your financial goals.

Despite a decrease in the rate of price growth, individuals who rely on Social Security benefits for income are still facing higher costs, Johnson stated.

Typically, beneficiaries allocate roughly half of their budgets towards shelter expenses, which have remained relatively stable despite a decrease in broader inflation rates.

The estimate for the Social Security cost-of-living adjustment for 2025 is uncertain and may be subject to revision.

The Social Security Administration determines the cost-of-living adjustment by comparing the third quarter CPI-W data of the current year to the third quarter of the previous year. If there is a percentage increase, it determines the COLA. However, if there is no increase, there is no COLA.

The agency typically announces the cost-of-living adjustment for the following year in October.

This is a developing story. Please check back for updates.