The federal government cost-of-living adjustment (COLA) for 2025 is a cost-of-living adjustment that will be applied to Social Security benefits and other federal programs. The COLA is calculated based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which measures the change in prices for a variety of goods and services purchased by urban wage earners and clerical workers. The COLA is designed to help protect the purchasing power of Social Security and other federal benefits from the effects of inflation.
The 2025 COLA is expected to be one of the largest in recent years, as inflation has been rising sharply in 2022 and 2023. The exact amount of the COLA will not be known until the CPI-W data for December 2024 is released in January 2025. However, some experts are predicting that the COLA could be as high as 5% or 6%.