Social Security Increase 2025 Disability: Projected Increase in Next Year’s Payment

Social Security Increase 2025 Disability: A sector particularly vulnerable to the effects of inflation is the recipients of social assistance programs. Each year, the Social Security Administration (SSA) introduces a cost-of-living adjustment (COLA) to help these individuals manage rising prices. While the 2025 COLA hasn’t been officially announced yet, preliminary forecasts are starting to emerge.

Inflation in the United States has been a persistent issue for both the government and citizens since the pandemic. However, price increases have been gradually easing due to actions taken by the Federal Reserve. The downside is that as inflation decreases, so does the COLA.

After a 5.9% increase in 2022, the COLA reached a decade-high of 8.7% in 2023. However, the adjustment for 2024 was only 3.2%, and experts anticipate that if inflation continues to slow in 2024, the COLA for 2025 could drop even further.

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Social Security Increase 2025 Disability: How much will your pension increase

The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) increased 2.9% in July over the same month the previous year, according to the most current Census Bureau report. Even though the SSA won’t make public the actual COLA hike until October, this number aids experts in providing an approximation now.

The Senior Citizens League reduced its estimate of the COLA from 2.63% to roughly 2.57% in its most recent report. More upbeat, Alicia Munnell, director of Boston College’s Center for Retirement Research, estimated that the adjustment will be between 2.6-2.9%.

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Vice president of Retirement and Income Solutions at Principal Financial Group Sri Reddy provided an even higher estimate, speculating that the 2025 COLA may range from 2.75% to 3.25%.

The monthly boost for Social Security retirement pensioners would be $54 if the COLA at least equals the 2.9% inflation rate from July. For survivors, it would amount to $44 per month; recipients of Social Security Disability Income (SSDI) would receive an additional $45 per month.

The official COLA

Every year in October, the Social Security Administration (SSA) releases the official COLA calculation, which is based on the CPI-W for the third quarter (July–September).

To determine the amount of the adjustment for 2025, the August and September statistics remain unaccounted for. According to projections, inflation will continue to drop, and the Fed is getting ready to lower interest rates in the fourth quarter, which runs from October to December.

For those who get assistance from social programs, the news is bittersweet. While this indicates that the cost of necessities is beginning to level off, it also implies that their pension will grow at the slowest rate in the previous three years.