On October 10, 2024, the Social Security Administration (SSA) will announce the 2025 Cost-of-Living Adjustment (COLA), affecting over 70 million Americans. With inflation slowing in 2024, experts predict a modest COLA increase of approximately 2.5% to 2.6%. This adjustment will impact monthly payments for Social Security beneficiaries, ensuring that their benefits keep pace with the rising cost of living.
How is COLA Calculated?
The SSA calculates the COLA using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). The agency compares the average CPI-W from the third quarter of the current year with the same period from the previous year. This percentage change determines the COLA, helping benefits retain their purchasing power despite inflation.
To understand more about COLA and how it works, visit Social Security’s official page.
Projected Increase for 2025
Early predictions suggest the 2025 COLA will be between 2.5% and 2.6%. While smaller than previous years—such as 2023’s 8.7% increase—this adjustment still aims to assist beneficiaries in managing the rising costs of essentials like healthcare, housing, and groceries.
For example:
- A retired worker receiving $1,920 monthly could expect around $48 more per month, bringing the total to $1,968.
- Survivor benefits, averaging $1,509, would increase by about $38 per month.
Key Dates and How to Check Your New Benefit
The new COLA will take effect in January 2025, with detailed letters sent to beneficiaries in December. Recipients can also check their updated benefits through the mySocialSecurity portal.
Read More News:
- Social Security COLA Increase for 2025: What Retirees Can Expect
- Social Security Payments: October 2024 Schedule and What to Expect
Conclusion
Though modest, the 2025 COLA will provide vital financial support to millions of Americans, helping them maintain economic stability amid fluctuating costs of living. Beneficiaries should stay informed and plan accordingly for these changes.