2025 Social Security COLA Increase to Be Announced on This Day in October
According to CNET, The Social Security Administration (SSA) typically announces the annual Cost-of-Living Adjustment (COLA) increase in mid-October, and we now know when to expect the announcement for 2025.
To address inflation, the SSA adjusts monthly benefit payouts for beneficiaries receiving Social Security (retirement and survivors), Social Security Disability Insurance, and Supplemental Security Income. Currently, the COLA for 2024 stands at 3.2%. Although we await the official announcement, experts tracking inflation trends can provide fairly accurate estimates for the upcoming year.
Expert Predictions for the 2025 COLA Increase
In this article, we’ll delve into the latest expert forecasts for the 2025 COLA increase, what the projected percentage translates into dollars, and when the official announcement is expected.
For additional insights, explore the four factors that could jeopardize your Social Security benefits and learn how to apply for Supplemental Security Income.
Understanding Social Security COLA
The annual cost-of-living adjustment is designed to help Social Security recipients keep pace with inflation. The adjustment is based on the average change in prices paid for consumer goods and services, determined by the Bureau of Labor Statistics within the Department of Labor. The SSA finalizes the COLA during the third quarter of each year.
Which Benefits Are Adjusted by COLA?
Social Security is not the only government program that benefits from COLA adjustments. Other programs, such as Social Security Disability Insurance, Supplemental Security Income, Medicare, and the Supplemental Nutrition Assistance Program (SNAP), also utilize COLA to adjust benefits for inflation.
Expected Announcement Date for 2025 COLA
The SSA traditionally announces the COLA increase for the following year in mid-October, with the new rate taking effect in January of the upcoming year. We anticipate that the announcement for the 2025 COLA increase will occur on October 10, 2024.
Lower COLA Predictions for 2025
The Senior Citizens League, a nonpartisan advocacy group for seniors, has forecast a lower COLA for 2025 compared to the 3.2% increase in 2024. The League’s latest predictions suggest a 2.5% COLA, slightly lower than its previous estimate of 2.57% in August.
If the 2025 COLA is indeed 2.5%, this would equate to a $48 increase in the average monthly benefit payment, raising the average total to $1,968. Despite being lower than recent years, the 2.5% increase remains consistent with the 20-year historical average of 2.6%.
While a 2.5% adjustment may not meet the expectations of many beneficiaries, it does indicate a decrease in inflation, which may lead to lower prices for some essential goods.
Individual Impact of the COLA Increase
It’s essential to remember that the $48 increase reflects the average monthly benefit; individual adjustments may vary based on several factors. For instance, retirement benefits can be larger if one waits until age 70 to apply, compared to applying at 62.
The annual COLA change is closely monitored by seniors, as it is intended to help them manage rising living costs. While the COLA increases have recently reached as high as 8.7%, many believe that they still fall short in covering the impact of inflation. A recent survey by the Senior Citizens League revealed that 69% of respondents felt their household costs rose faster than the COLA last year, with food and housing costs leading this trend.
Year-Over-Year COLA Increases
Here’s a summary of the COLA increases over the past few years:
| Year | Increase over previous year |
|---|---|
| 2024 | 3.2% |
| 2023 | 8.7% |
| 2022 | 5.9% |
| 2021 | 1.3% |
| 2020 | 1.6% |
Keep in mind that these are estimates that can fluctuate monthly based on the prior month’s inflation rate. While they tend to align with the official rates, they are not always exact.
For further information, discover why SSI recipients may not receive a check this month and what to do if you have been overpaid on your monthly benefit.
