COLAs, Inflation & Taxes… Oh My!
Could we be facing the worst COLA we’ve seen in five years? It’s only February of 2024, but many are already looking ahead to 2025.
And things aren’t looking great when it comes to Social Security and the 2025 COLA. Many estimates predict the 2025 COLA could be as low as 1.5%.
Even though inflation may be easing, overall costs are still at record levels. Unfortunately, the way COLAs are calculated, could result in an increase so small, most people won’t even be able to notice the difference.
On top of the projected low COLA next year, more and more seniors are facing the reality of owing taxes on their benefits. This is a direct result of the fact income thresholds for Social Security haven’t been updated since 1984. Put it all together, and it looks like 2025 could be a difficult financial year for retired folks.
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