COLA, a yearly adjustment by the Social Security Administration, helps millions of beneficiaries maintain their Social Security retirement income during periods of high inflation.
COLA 2025 Increase Release Date: As of the most recent figures, over 53 million Americans are eligible for Social Security retirement benefits, and millions more depend on Social Security survivors and disability benefits.
Though Social Security accounts for a sizable percentage of most beneficiaries’ retirement income, for many of them it is their only inflation-protected source of income. Having a 401(k) or other retirement savings account does not, after all, provide you with yearly adjustments during periods of high inflation.
Social Security COLA Estimate for 2025 Surges Due to Inflation & What You Need to Know
Conversely, each year the Social Security Administration, or SSA, looks at current inflation statistics and, if necessary, implements a cost-of-living adjustment, or COLA.
Social Security’s COLA for 2024 was 3.2%, following a 5.9% increase in 2022 and a huge inflation-driven 8.7% adjustment in 2023. Here’s when we’ll get the precise calculation of the COLA for 2025.
Though the Social Security Administration (SSA) will release the official numbers in October, several analysts and national groups have already started to speculate on the potential rise in Social Security benefits in 2025.
2025 COLA Benefits: Here’s How Much the Average Benefit Could Go Up at 62, 67, and 70
The nonpartisan Senior Citizens League projects a 2.6% COLA in 2025. The number, which follows rises of 5.9% in 2022, 8.7% in 2023, and 3.2% in 2024, is the lowest in five years. That is, nevertheless, an improvement over the 1.7% estimate the organization made in February of last year.
Notably, this number is an unofficial estimate. Only when the SSA releases the notification will the real increase be revealed. Moreover, contrary to what one may think, a drop in COLA can be beneficial.
Given that inflation is what determines the COLA, a decline in the rise suggests that, in line with expert predictions, price increases may slow down in the following year.
As to the projections of the International Monetary Fund (IMF), US inflation in 2025 would be 1.8%. On its part, the OECD projects it will hit 2% in the first quarter of 2023.
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