As the final days before the 2025 Cost of Living Adjustment (COLA) are upon us, millions of Social Security beneficiaries are anticipating an announcement on how much their monthly payments will increase. The official COLA for 2025 will be determined using inflation data from the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), typically considering the months of July, August, and September. The final number is expected to be released on October 10, 2024.
What to Expect from the 2025 COLA Increase?
While the official figures for September are still pending, current estimates based on the available inflation data from July and August suggest that the COLA increase for 2025 may be around 2.5%. This is lower than the 3.2% increase seen in 2024. The average Social Security beneficiary, who currently receives $1,920 per month, could see an increase of around $48 if this projection holds.
However, it’s essential to remember that this estimate may change depending on the final CPI-W figures for September. For retirees, a 2.5% COLA increase would still provide some relief, especially in a lower inflation environment. But there is a potential caveat to this increase—Medicare Part B premiums.
Will Medicare Part B Affect Your Social Security Increase?
Seniors enrolled in both Social Security and Medicare will have their Medicare Part B premiums automatically deducted from their monthly checks. In 2024, Medicare Part B increased by $9.80, which reduced the net Social Security benefit. If Medicare premiums rise similarly for 2025, beneficiaries may only see a $38 monthly increase instead of the projected $48. Medicare has yet to release its updated premiums, and they likely won’t announce these until after October 10. This means that while you may know your COLA increase soon, the actual impact on your monthly payment may take longer to finalize.
For more detailed information on how COLA is calculated, visit the Social Security Administration’s website.
Breakdown of 2025 COLA Projections
Based on current projections, here’s how different groups of beneficiaries could see their benefits change:
- Retirement benefits: On average, monthly payments will increase from $1,900 to $1,948—an extra $48.
- Survivor benefits: The average payment will rise from $1,505 to $1,543, adding $38 per month.
- Disability benefits: Recipients can expect an increase from $1,537 to $1,575, resulting in $38 more monthly.
- SSI benefits: Individuals receiving SSI may see their payments rise from $943 to $967, adding $24 monthly.
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While the projected increase might not be dramatic, lower inflation rates mean beneficiaries could still experience better purchasing power in 2025.