For the year 2025, it is predicted that the Social Security payments will receive a significant boost in their amounts. If there was a person receiving Social Security benefits, they probably already have October marked on their calendar, as during that time of year, the Social Security Administration (SSA) announces the cost of living adjustment (COLA) for the following year. This adjustment is made annually and seeks to counter the effects of inflation by applying a percentage increase.
The COLA adjustment impacts the monthly amount of benefits that individuals receive under the Social Security program, including basic Social Security insurance, as well as SSDI and SSI, among others. The exact amount that will be added to monthly payments will be kept secret until the official COLA is published; however, there are experts who observe inflation trends and have managed to estimate this with great accuracy.
Predictions for the COLA Increments — Social Security Benefits to Raise Soon
Current predictions indicate that the increase will be smaller compared to the 3.2% established for 2024. Below are the most recent predictions about the 2025 COLA, and we will continue updating this information as announcements are made, including the official SSA COLA increase that should be disclosed in the coming weeks. It is advisable to check the four actions that could put your Social Security benefits at risk and the process for applying for Social Security disability insurance.
To adapt to inflation, Social Security beneficiaries usually receive a cost of living adjustment in January. This adjustment considers the average changes in consumer prices, and it is determined by the Bureau of Labor Statistics in the Department of Labor. The SSA calculates this adjustment during the third quarter of each year.
What Government Benefit programs Are Set to Get COLA Increases
Social Security is not the only program where COLA has an impact. Other benefits such as Social Security Disability Insurance, Supplemental Security Income, Medicare, and the Supplemental Nutrition Assistance Program (which includes food stamps and additional programs) use the COLA to readjust benefits considering inflation.
The Senior Citizens League, an organization that defends the interests of older adults, has forecasted that COLA will be lower for 2025 compared to the 3.2% of 2024. The League’s latest projection suggests a 2.5% COLA, which is slightly lower than its August prediction of 2.57%.
Just Extra $48 for Beneficiaries
If the COLA for 2025 is set at 2.5%, it will translate into a $48 increase in monthly payments, raising the total monthly average to $1,968. The League also highlights that although this new prediction is lower than in previous years, it still remains within the 20-year historical average, which is 2.6%.
Older adults pay a lot of attention to these adjustments, as the annual change in COLA aims to help them keep up with the rising costs. Although there have been recent years when the COLA increase reached as high as 8.7%, some people believe that it is still not enough to cover real inflation. A survey by the Senior Citizens League indicated that 69% of respondents said their living costs increased faster than the COLA last year, with the costs of food and housing topping the list.