The Cost of Living Adjustment (COLA) gives Americans who get Social Security a small rise in their payments every year to keep up with inflation.
The goal of this change is not to make anyone richer, but to help keep the rising prices of goods and services in check over time.
The COLA is adjusted every year based on inflation, which means that each year’s raises are different.
The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) is used to figure out this adjustment. It eventually determines how much the payment goes up.
How much will the cost of living adjustment (COLA) go up in 2025? When people start getting Social Security payments in January 2025, they will go up because of the COLA.
Even though the exact percentage has not been made public yet, early figures show a small rise of about 2.5%. This number is likely to be lower than the change for 2024, mostly because inflation has been stable over the past few months.
Important information regarding the COLA increase for 2025:
Date it goes into effect: The COLA change will happen in January 2025. It is expected that the COLA will go up by about 2.5%, which is less than the 2.6% rise that was seen in 2024.
Effect every month: For every $100 in benefits, there would be an extra $2.50 every month. Importance over a year: The monthly rise may not seem like much, but it can add up to a big amount over a year.
The official COLA number will be released in October, most likely in the second week. This is a very important month for the official announcement. What affects the increase in COLA? The increase depends on the CPI-W’s estimates of inflation rates for July, August, and September.
Automatic process: You do not have to fill out a form to request the change; it will be made immediately in your first payment of 2025. The effect of the cola grow every month.
If the COLA rises by 2.5% in 2025, everyone who gets a monthly payment will get an extra $2.50 on top of every $100 they get. This may seem like a small increase, but for people who depend on their Social Security payments a lot, it can have a big effect over the course of the year.
A senior who gets $1,000 a month, for example, would get an extra $25 each month if the COLA was 2.5%. Over the course of a year, this raise would add up to $300, which would help some with the rising cost of living.
When can we expect to learn the official COLA figure for 2025?
October is the most important month for finding out the real COLA. In the second week of October, the U.S. government will say exactly what percentage Social Security payments will go up.
Until that happens, the expected number of 2.5% is still just a guess based on how inflation has been going in the past.
This is important to note: the COLA adjustment happens instantly, so beneficiaries will not have to do anything to get the rise. Starting in January 2025, this change will be made to payouts by the Social Security Administration.
The Consumer Price Index (CPI-W) for July, August, and September shows the inflation rate, which is the main thing that determines the COLA for 2025.
These three months are very important for figuring out the percentage raise that will be made to Social Security benefits.
To sum up, the projected rise in 2025 may not be as big as in previous years, but it is still an important way to help retirees and other recipients keep up with inflation.
Also see:-I have not got my September Social Security Disability payment, how can I claim it?
