The 2025 Cost-of-Living Adjustment (COLA) has just been released, and it’s essential to understand how this will affect your Social Security income and long-term retirement planning

What You Need to Know:

• The 2025 COLA** increase has been set at 2.5%.
• This is notably lower than recent years. For context, the COLA** for 2023 was 5.9%, and 2024 saw an 8.7% increase – the largest since the early 1980s.
• While the 2025 COLA may seem small in comparison, it’s actually a positive sign. It indicates that inflation is stabilizing and improving compared to previous years.
• Remember, the COLA is determined each October for the following year, based on a formula that factors in inflation rates.
   

What This Means for You:

While retirees don’t have control over the COLA, it’s crucial to consider it in your retirement planning, especially when deciding when to claim Social Security benefits. 

When planning for your income needs over a 20-30-year timeline, even modest inflation rates of 2.5-3%, can significantly impact your purchasing power. That’s why understanding COLAs is vital to maintaining financial confidence throughout retirement.

By maximizing income sources with Cost-of-Living Adjustments, like Social Security, you can better protect your financial stability as inflation impacts your expenses over time.

Next Steps:

We understand that this information may raise questions about your personal financial situation. Our team is here to help you navigate these changes and ensure your retirement strategy remains on track.

In addition to Social Security and income planning, we take a comprehensive approach by helping you achieve clarity in all six critical areas of retirement: behavior, investments, taxes, healthcare, and legacy.

If you’d like to discuss how the 2025 COLA might affect your specific circumstances or if you have any questions, please don’t hesitate to reach out.

We’re here to provide the guidance you need to maintain your financial confidence.

Please call or text us today at 770-249-7424 to schedule a review call with one of our advisors.

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SOURCE: ** https://www.ssa.gov/oact/cola/colaseries.html

Disclaimer: RichLife Advisors is not associated with or endorsed by the Social Security Administration or any other government agency. Maximizing your Social Security Benefits assumes foreknowledge of your date of death. If as an example you wait to claim a higher monthly benefit amount but predecease your average life expectancy, it would have been better to claim your benefits at an earlier age with reduced benefits. Investment advisory services offered through Fiduciary Capital, Inc., a state registered investment advisor.