COLA Increase 2025 Projection: What is the latest increase for social security in 2025?
According to Marca, The Cost of Living Adjustment (COLA) is a vital economic measure in the United States designed to protect individuals on welfare from the impacts of inflation. COLA adjusts federal benefits to keep pace with the rising costs of living. The Social Security Administration (SSA) calculates this adjustment by analyzing inflation data and various economic indicators.
How COLA is Determined
The SSA uses the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) to gauge the rise in consumer goods costs experienced by a segment of the U.S. population. This index tracks the average costs of goods such as food, beverages, housing, and transportation. A rise in the CPI-W typically indicates an increase in inflation, which then influences the COLA calculation for Social Security and Social Security Disability Insurance (SSDI) benefits.
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COLA for 2024
For 2024, the COLA was set at 3.2%, meaning Social Security and SSDI benefits increased by 3.2% from the previous year. This was a decrease from the previous year’s COLA of 8.7%. For example, if someone received $10,000 in 2023, their benefit would rise to $10,320 in 2024.
Predictions for 2025
While the official COLA for 2025 will not be announced until all relevant data is compiled in October, experts have provided early predictions. According to the Senior Citizens League, inflation is expected to decrease through 2024. As a result, they anticipate the COLA for 2025 could be set at approximately 2.57%. This would mean that someone receiving $10,000 in 2024 would see their benefit increase to $10,257 in 2025.
