COLA, announced monthly by the SSA, helps retirees maintain value of Social Security benefits amidst inflation, with estimates ranging from 2.5% to 3.2%.
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2025 COLA SSDI Increase Date: Cost-of-Living Adjustments (COLA) help retirees keep up with inflation by ensuring that Social Security benefits maintain their value as prices increase. Each October, the Social Security Administration (SSA) announces the COLA based on inflation data from the Consumer Price Index (CPI).
Experts, like The Senior Citizens League, estimate the COLA for 2025 will be around 2.5%. While lower than in recent years, it still provides retirees with an important income boost. For example, the COLA for 2024 was 3.2%, increasing monthly benefits.
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The adjustments were even higher in 2022 and 2023, with a 5.9% increase in 2022 and an 8.7% rise in 2023, the largest since 1981. These larger adjustments were driven by high inflation in 2021 and 2022, which led to steep price increases for goods and services.
This indicates that COLA rates are starting to return to more normal levels and represents a significant decrease from the extremely high rates of inflation of the previous few years. Given that the average COLA historically has been 2.4%, the 2.5% estimate for 2025 makes sense.
The annual Cost-of-Living Adjustment (COLA) is very important for retirees to keep their purchasing power as the cost of living goes up. The upcoming raise might not be as big as in previous years, but it’s still good. For example, the 3.2% change in 2024 gave beneficiaries an average monthly boost of more than $50. The expected 2.5% increase in 2025 will give you a similar boost, though the exact amount will depend on your benefits.
The COLA will change all of your benefits, such as those from Social Security and federal programs like FERS (Federal Employees Retirement System). But people who get FERS benefits before age 62 or who get disability benefits may have a different COLA calculated.
SSDI COLA Increase 2025: What to Expect from 2025 COLA? How much will it Increase?
The COLA becomes operative on December 1st of the same year after it is determined. But you won’t really notice this increase in benefits until your December payment is made on the first business day of January. Every year, at the same time, beneficiaries will notice the updated amount in their Social Security checks in January.
Therefore, in January 2025, if you receive Social Security benefits, make sure to keep an eye out for that increased payment amount. The COLA adjustment is a crucial tool for helping retirees manage rising costs and maintain their standard of living, even though it may seem small in comparison to recent years.
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