2025 COLA Projection: Find out how much your SSI could be affected by the latest COLA increase prediction

2025 COLA Projection: There is good and bad news for people getting Social Security in 2025. That being said, they might get a raise in their benefits of more than 2.7% for the fourth year in a row. It’s not good news that this rise is due to general inflation.

The cost-of-living adjustment (COLA) determines how much additional money beneficiaries of Supplemental Security Income (SSI) and Social Security Disability Insurance (SSDI) will get annually. The COLA is determined using the third quarter’s Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).

Analysts thought the CPI-W would go up 3.2% in May, but it only went up 2.9% in June. The most current predictions say that inflation will drop even more, to 2.7% in the third quarter, which runs from July to September.

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The view is complex. It looks like a good thing that inflation is going down. But this also means that people who get Social Security will get less money. What will happen to retirees?

A rise of more than 2.7% may seem good for seniors in theory, but that doesn’t mean that they can buy more things. Even though the goal of the COLA is to keep pensions in line with inflation, inflation can have an effect that is greater than this annual raise.

Also, the CPI-W shows that prices for widely bought items went up even though the core CPI keeps going down and food prices only went up 2.2% overall in June. In June, beef roasts went up by 10%, pork chops went up by 7%, and eggs went up by 10.2%. Seniors have been hit the hardest by inflation when it comes to costs like gas, medical care, drugs, and energy. As a result, a 2.7% rise will keep pensions just above the line for inflation.

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But keep in mind that these are projections based on the work of experts and organizations like the Senior Citizens League, which keeps an eye on the variables that can impact the COLA.

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The government announces the COLA increase every year in October. It goes into force in January of the following year. In 2022, it went up by 5.9%, in 2023 by 8.7%, and in 2024 by 3.2%. Because of the latter, retiree payments went up by an average of $59 a month.

People think the economy will do a little better in 2025. In any case, it is best to be ready for anything because people with lower incomes are usually the ones who have money problems.