3 things to do right now if you’re worried about your 2025 Social Security COLA

If you’re curious about what the 2025 cost of living adjustment (COLA) will look like, you’re in good company. But unfortunately, this information won’t become available until October. That’s because COLAs are calculated based on inflation data from the third quarter of the year. Since we’re halfway through Q3, it’s too early to have a definitive number.

However, there are estimates based on the inflation data we have so far. The nonpartisan League of Senior Citizens projects that the 2025 Social Security COLA will rise to 2.57 percent. This is a notable decrease from the 3.2% COLA Social Security recipients received in early 2024.

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If you’re worried that next year’s Social Security COLA won’t be enough for you, now is the time to take action rather than sit back and wait for your monthly benefit to barely increase. Here are some steps worth taking.

1. Rethink your spending

Many Social Security recipients live a modest lifestyle and limit themselves to basic expenses. You might think you do the same. But when was the last time you did a deep analysis of your spending?

If you go through that exercise, you may find that there are one or two bills that you can modestly reduce. This could mean cutting back on a cable plan or shopping around for homeowners insurance to lower your premium rates.

2. Move to a less expensive place

Social Security does not adjust its monthly benefits based on local costs of living. Whether you live in one of the most expensive areas of the country or one of the cheapest, your monthly benefit remains the same (although the state you live in could determine whether you pay state taxes on your Social Security benefits).

In light of this, it’s worth looking into relocation options if there’s an area that would allow you to stretch that money further. But don’t just look at housing costs. Look at factors like state income taxes, sales tax and more. Also, make sure that wherever you go, you have access to decent healthcare, as this is an important thing to have during retirement.

3. Join the gig economy

The gig economy isn’t just for millennials and Gen Zers. If you could use more retirement income, especially in anticipation of a small Social Security COLA next year, it’s worth exploring your options for earning extra cash while doing something enjoyable (or at least tolerable).

If you’ve always played an instrument on the side, you could offer piano or guitar lessons from your home. If you love animals, pet sitting services are often in high demand. And if you’re a former educator, you could try your hand at tutoring.

These are just a few examples. But earning a few hundred dollars a month can give you quite a bit of breathing room and might alleviate some of your financial stress.

The future of Social Security’s COLA will not be officially announced for some time. But don’t wait until October to hear that number and start panicking. Instead, take action now so you can prepare for a more financially sound 2025.