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Even though we’re only about halfway through 2024, at this point, many seniors on Social Security are eager to know what 2025’s cost-of-living adjustment, or COLA, will look like. And the reality is that we won’t know for sure until October. But if you’re looking for some clues as to what next year’s Social Security COLA might amount to, here are two factors you’ll need to pay attention to.

1. Inflation

Stubbornly high inflation has been a problem for consumers since 2021. After peaking in 2022, it’s thankfully been cooling down, leading to more moderate increases in living costs over the past couple of years.

But you can’t just look at what you’re paying for groceries these days as a measure of what 2025’s Social Security COLA will be. Remember, those COLAs are calculated based on third-quarter data from the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). For Social Security benefits to increase, there needs to be a rise in the CPI-W from one year to the next.

Based on the most recent CPI-W data we have, the current estimate for next year’s COLA is 2.57%, courtesy of the nonpartisan Senior Citizens League. But that number could rise or fall depending on how inflation trends in the upcoming quarter.

2. The cost of Medicare Part B

The cost of Medicare Part B isn’t used to calculate COLAs. But when the cost of Part B increases from one year to the next, that extra money comes out of seniors’ COLAs.

At the start of 2024, Social Security benefits rose 3.2%, bringing the average monthly benefit of $1,848 up to $1,907. That’s a $59 monthly increase before accounting for Medicare Part B. But this year, the standard Part B premium rose from $164.90 to $174.70 — a $9.80 increase per month.

Now it’s not a given that every Medicare enrollee is on Social Security, or vice versa. But for those enrolled in both programs, that $9.80 came out of this year’s COLA. That means the average Social Security recipient didn’t automatically get an extra $59 per month in their pocket — they may have only gotten $49.20.

So far, the cost of Medicare Part B is expected to rise by $10.30 a month in 2025 to $185 That could, unfortunately, erode whatever Social Security COLA comes down the pike.

Try your best to manage your expenses well

If you’re someone who’s reliant on your upcoming Social Security COLA to make ends meet, then there’s probably not a whole lot of wiggle room in your budget. So it’s important to do what you can to manage your expenses wisely.

First, assess your spending and see if there are expenses — even small ones — you can reduce or eliminate. Next, think about whether relocating or moving to a less expensive home makes sense.

If you’ve got a super-low mortgage rate locked in on your current home, a move may not save you that much money if you’ll need to finance a replacement home. But if you’re in a paid-off home with expensive maintenance and property taxes, buying a home in cash that costs less to live in could be a smart bet.

Finally, consider joining the gig economy if Social Security provides the bulk of your income and money is therefore tight. Earning even an extra $100 per month could give you some breathing room so you’re not as stressed over the idea of a smaller COLA in 2025.