13 Skyrocketing Costs That May Affect Your Social Security Budget in 2025

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Every year, the Social Security Administration (SSA) provides a cost-of-living adjustment to help beneficiaries keep up with rising inflation. But it’s an imperfect science, particularly as various costs impact each retiree differently.

Depending on your lifestyle, you might be far more or less affected by rising inflation than others across the country. That’s why keeping a detailed retirement budget is important, so you can see exactly where your money is going and how your costs are changing from year to year.

Here’s a look at the COLA and inflation situation for 2025, along with a list of skyrocketing costs that could impact your Social Security budget in 2025. 

What Is the Social Security COLA for 2025? 

For 2025, the annual Social Security cost-of-living adjustment (COLA) is 2.5%. If you receive a $1,500 monthly benefit, for example, this will rise to $1,537.50 in 2025. That amounts to an increase of $450 per year in this example.

For comparison, the COLAs for the prior five years were 3.2%, 8.7%, 5.9%, 1.3%, and 1.6%, respectively.

How Does That Compare With the Rate of Inflation?

The inflation measurement most Americans are familiar with is the consumer price index or CPI. But for calculating the annual COLA, the Social Security Administration uses a slightly different gauge, the CPI-W, which is the Consumer Price Index for Urban Wage Earners and Clerical Workers. Combined with the fact that the annual COLA is computed in October every year, it rarely aligns exactly with the CPI.

For the past five years, for example, the CPI has come in at 4.1%, 8.0%, 4.7%, 1.2%, and 1.8%, respectively. The estimate for 2024, based on the change from the second quarter of 2023 to the second quarter of 2024, is 3.2%.

As you can see from the above numbers, while the CPI-W generally tracks the same trend as the CPI, the two numbers are rarely exactly the same.

What Costs in Particular Are Much Higher in 2025 Than They Were in Prior Years?

Based on a CBS News analysis using data from a variety of sources, including the U.S. Department of Labor and Zillow, here’s a look at some of the biggest price gains for various goods and services from 2019 to 2024, all of which have risen by at least 30%:

• One dozen eggs: from $1.38 to $3.82, a 176% increase
• Frozen orange juice: from $2.41 to $4.23, a 75% increase 
• One pound of coffee: from $4.17 to $6.47, a 55% increase
• Loaf of bread: from $1.30 to $1.98, a 52% increase
• 8 ounces of yogurt: from $1.15 to $1.70, a 48% increase 
• One pound of ground beef: from $3.85 to $5.67, a 47% increase
• Cookies: from $3.59 to $5.17, a 44% increase
• One pound of steak: from $5.86 to $8.15, a 39% increase 
• Utility gas: from $1.02 to $1.40, a 37% increase
• One pound of chicken breast: from $2.93 to $3.97, a 36% increase
• One pound of rice: from $0.80 to $1.08, a 35% increase
• One-half gallon of ice cream: from $4.80 to $6.34, a 32% increase
• One-half gallon of milk: from $3.10 to $4.02, a 30% increase 

Of course, these are just national averages, and on regional and local levels, prices for some items may vary dramatically. But overall, it’s a good indication of how much the costs for many basic goods have increased significantly since before the pandemic. 

How Will This Affect Your Social Security Budget?

The good news is that inflation has plummeted since its rate of year-over-year change peaked at 9.1% in June 2022. However, this doesn’t mean that prices have fallen — they just aren’t going up as fast as they once were. While the Social Security COLA can help retirees cover these costs, in many cases, you might have to trim some of your spending in other areas to make up the difference.  

The best way to plan, whether or not you’re already retired, is to make an accurate budget based on your income and real-world costs. A good budget will remove all the guesswork in terms of finding out where you’re overspending and where you might be able to make some cuts to keep everything in balance. 

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