Soon, people who get Social Security will know how much their annual cost-of-living change will be in 2025. If the predictions come true, it could be the smallest rise in benefits since 2021, which could make them sad.
Mary Johnson, a social security and Medicare expert who works on her own, said last month that the Social Security cost-of-living increase, or COLA, might be 2.5% in 2019.
Johnson did the math and found that this change would mean that the average retired worker’s income of $1,920 would go up by $48 a month.
Beneficiaries, on the other hand, got 3.2% more money this year. Because prices are going up, people who get benefits will get the biggest raises in forty years in 2023 and 2022, with 9.7% and 5.9% COLAs, respectively.
Joe Elsasser, president of Covisum, a software business that helps people claim Social Security, and a certified financial advisor, also said that many people are still feeling the effects of rising costs, even though the 2025 COLA is expected to be lower than in previous years.
So, even if their benefits go up a little, their current income might not be enough to pay for the things they need.
Social Security payments will change starting in January 2025
A neutral group for seniors called the Senior Citizens League also predicted a 2.5% COLA in 2025. The head of Boston College’s Center for Retirement Research, Alicia Munnell, said that the most latest data shows that benefits will go up by 2.5% next year.
The COLA for Social Security has been about 2.6% per year on average over the last 20 years, according to the Senior Citizens League.
Johnson’s calculations from the previous month show that the current 2.5% prediction has a 17% chance of going up and a 13% chance of going down.
When the official Social Security cost-of-living increase comes out, it will include inflation data from one more month. The consumer price index, which is the other piece of information, will also be out on Thursday.
The Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W, is usually used to figure out the COLA increase. The CPI-W is a subset of the total consumer price index.
To understand how the COLA is found, remember that the CPI-W statistics from last year’s third quarter is compared to this year’s third quarter. So, the percentage rise from the previous year to the current year is used to figure out the COLA.
Hurricanes can change the results, but Johnson thinks that Hurricane Helene’s effects, which happened too late in September (it hit land on the evening of September 26), should not have been taken into account in September’s figures.
She said that even though gas prices went down last month, it might not have been enough to change the COLA figure.
Even though storms Helene and Milton happened recently, the Bureau of Labor Statistics finally announced last week, on October 10th, that the COLA will go up by 2.5% in 2025.
The Social Security Administration will figure out how much money people will get next year from Social Security based on this number.
When will the 2.5% COLA increase become effective?
The new cost of living adjustment was already made public, but people who get retirement, survivor, and disability insurance (RSDI) or Supplemental Security Income (SSI) will not start getting their raises until January 2025.
It is possible that only people who get SSI will get their higher checks after December 31st of this year. This is because the SSI program always sends its payment on the first of the month.
Since January 1st is a holiday, the SSA will move the payment to the work day before. Here are the accepted payment amounts that beneficiaries will get in 2025, based on the new COLA.
| Retirement benefits (Plus 2.5%) | Survivor benefits (Plus 2.5%) | SSDI benefits (Plus 2.5%) | SSI benefits (Plus 2.5%) |
| On average: $1,948
Age 62: $2,778 Age 67: $3,918 Age 70: $4,995 |
On average: $1,543
Individual: $1,817 2 Children: $3,744 |
On average: $1,575
Blind recipients: $2,655 Maximum payment: $3,918 |
On average: $715
Individuals: $967 Couples: $1,450 Essential person: $484 |
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