All the Social Security beneficiaries are paid directly into bank accounts by the Social Security Administration (SSA), and tens of millions of beneficiaries receive their money monthly. On Tuesday, October 1, the first payment shipment will be made to those who have the Supplemental Security Income (SSI) benefit. SSI provides payments to adults and children with disabilities or blindness, as well as adults age 65 or older with retirement income that may not be enough to meet their needs.
The second round of payments will be made on Thursday, October 3 for Social Security beneficiaries who have applied before May 1997. The SSA always recommends waiting at least three business days before contacting them, if your payment has not arrived by the due date.
In January, the Average Monthly Retirement Benefit for Social Security Claimants Was $1,907
The calculation of retirement benefits takes into account a person’s 35 highest-earning years in their career and the age at which they began claiming benefits, and also adjusts for inflation. On the website, the SSA explains: “The maximum benefit depends on the age at which you retire. For example, if you retire at full retirement age in 2024, your maximum benefit would be $3,822. However, if you retire at age 62 in 2024, your maximum benefit would be $2,710. If you retire at age 70 in 2024, your maximum benefit would be $4,873.”
The Social Security COLA adjustment for the year 2025 is projected to be close to 2.5%, based on new inflation data, these estimates do not reach the inflation rate that exists today, which creates some concern that the COLA may not fully reflect retirees’ actual living expenses, particularly in areas such as food, housing, and medical expenses.
What Is the Expected Increase for 2025, See Some Predictions
The final COLA for the year 2025 will be determined in just a few days, in the month of October, and the projections that have been made recently have marked a significant gap between inflation and the proposed adjustment, there have been some discussions about the latest projections for the 2025 Social Security Cost of Living Adjustment COLA, and how cooling inflation could affect it.
With the publication of new data regarding inflation, a revision of the estimates for next year’s COLA was made and it is important to understand what this means for beneficiaries. Looking at the data of what COLA will look like for next year, we already know, COLA is a really important number for all those retired people, and as has been talked about in the past, this is a moving target, since all of these are just estimates.
Read More: 3 Crucial 2025 COLA Dates Every Social Security Beneficiary Should Know
We felt the need to state this from the beginning, but it’s actually relevant to see where these estimates are, because they come from professionals in this space who make a living from this, and it has a huge impact on the quality of life of retirees. According to inflation data that was recently released by the federal government in May, the Social Security COLA for the year 2025 could be around 2.5%, so the Senior Citizens League projects that 2.5% LINE.
Some External Analysts Also Made Their COLA Forecasts
Other external analysts, such as Mary Johnson, have made forecasts of a slightly higher COLA, around 3%. But if we look at the information that recently came out from the BLS about the Consumer Price Index, which had an increase of 3.3% in the last 12 months.
Indeed, both estimates, even with Mary Johnson’s higher estimate of a 3% COLA, are still below inflation. And as has been analyzed in the past, the COLA for the year 2024, most retirees have the feeling that this was not enough to match the salary with inflation given the unique combination of products that retirees face.
There’s the Senior Consumer Price Index that relates more to food and healthcare, which is known to make up a larger percentage of retirees’ consumption patterns. Therefore, simply using the broad-based CPI figure is often not a reflection of the reality of what retirees pay, which is why we can see these gaps and people can feel that they are not falls short because their actual spending is higher than the figure COLA is trying to adjust.