Personal Finance

COLA Increase 2025: Benefits and Drawbacks of this year’s Increase

Retired workers will receive a 2.5% COLA increase in 2025, potentially aiding in regaining purchasing power, but the previous two large increases may mitigate the impact.

COLA Increase 2025: Retired workers will get a 2.5% COLA increase in 2025. This extra income is a welcome relief and may help beneficiaries regain some of the purchasing power they lost last year. However, there is a downside to this positive news.

The drawback comes from the fact that there were two very large COLA increases in the previous two years, which may lessen the overall impact of this year’s smaller adjustment.

COLA Increase 2025: Benefits and drawbacks of this year’s increase being smaller than previous ones

The Cost of Living Adjustment (COLA) for 2025 has been released, and next year, people who get benefits will see a 2.5% rise in their monthly payments. This change, which is smaller than in previous years, is due to new information about inflation and the rising cost of living.

OPM COLA 2025: How much will federal workers payment increase next year?

What the COLA is meant to do is help people, especially retirees and low-income families, keep their purchasing power as the prices of basic goods keep going up.

The average retired worker who gets Social Security will see a small increase in their monthly benefits because of the increase.

The average survivor beneficiary and the average worker with a disability would also see increases in their monthly benefits in the upcoming year.

2025 COLA SSI Increase Date: When Will SSI Recipients Receive Their Extra Payment?

There is a drawback to this circumstance as well, though. A large increase in Medicare Part B premiums may mean that a sizable percentage of beneficiaries do not see a net gain at all, or may see no gain at all.

The majority of Social Security recipients have monthly deductions from their benefits to pay for Medicare Part B, which covers outpatient services. However, Part B premiums typically increase every year as a result of the growing expense of name-brand drugs.

Eduvast Desk

Recent Posts

STAR Phase 2 Payments: How Much Will You Get in New York’s School Tax Relief Program?

New York has launched phase two of its STAR program, offering $350 to $1,500 in…

14 hours ago

VA 90% Disability Pay 2025: Monthly Compensation for Veteran With Spouse, Child, and Parent

A veteran rated 90% disabled with a spouse, one child, and a dependent parent will…

14 hours ago

Did Los Angeles Approve a $30 Minimum Wage for Hospitality Workers? Here’s What We Know

Los Angeles approved a plan to gradually raise minimum wages for hotel and LAX workers…

18 hours ago

100 Percent VA Disability Benefits: How Much Will Veterans with a Spouse and Child Get in 2025?

Veterans with a 100% disability rating, a spouse, and one child will receive $4,201.35 per…

2 days ago

2026 VA Disability Rates: When Will the New Increase Be Announced?

Veterans are waiting for the 2026 VA disability pay raise update, expected in October. The…

3 days ago

$600 Tariff Rebate Checks Could Be Coming Soon: This New Bill is for Working Families

A new bill may give millions of Americans a $600 stimulus check in 2025. It…

3 days ago