The 2025 COLA: What It Means for Your Retirement Income
Confused by Social Security?
Every fall, retirees watch the news for one key update: The next Social Security Cost-of-Living Adjustment (COLA). Whether COLA is high or low, the same questions always come up.
1. COLA Helps Everyone—Even If You Haven’t Filed Yet
Many people believe you only get COLA once you start taking benefits. That’s incorrect. Your benefit amount grows with COLA even before you file.
2. COLA Protects Your Purchasing Power (Usually)
COLA is meant to keep up with inflation. Over decades, COLA helps reduce long-term erosion of your benefit.
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3. COLA Can Trigger Higher Taxes
Here’s the part no one tells you: Higher COLA = higher taxable income = potential IRMAA surcharges. Filing strategy should include COLA-tax interactions.
About Author
Ray R. Harris
Ray R. Harris, RSSA®, partners with tax and legal professionals to provide specialized Social Security claiming analysis for high-net-worth clients aged 58–70. A former executive with an MBA and background in Finance, Ray mitigates liability for his partners by ensuring their clients optimize spousal benefits, tax efficiency, and lifetime income.
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