2025 Social Security COLA increase: This is how much it could boost payments
The Senior Citizens League has shared a new projection of COLA 2025. This is what Social Security payments could look like when applied next year.
Each year, Social Security payments tend to increase thanks to the cost-of-living adjustment (COLA), which aims to keep the amount that beneficiaries receive from losing purchasing power due to rising inflation.
The COLA is calculated based on changes in the Consumer Price Index for Urban Wage Workers and Clerical Workers (CPI-W).
The calculation compares the data from the third quarter of the current year, that is, July, August and September with the data from the same period the previous year. The result is the percentage that Social Security payments will increase.
Although there are still several months until the official 2025 COLA is announced, the same day as the CPI-W for September 2024 which will fall on 11 October this year, some organizations have already made some estimates and predictions, based on the inflation data that has been published so far.
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The possible amounts of Social Security payments in 2025
Following the release of the Consumer Price Index report for May, The Senior Citizens League, one of the nation’s largest nonpartisan senior groups, estimates that the cost-of-living adjustment (COLA) of Social Security for 2025 could be 2.57%.
This amount would be less than in 2024, since the cost of living adjustment (COLA) was 3.2%. In general terms, the lower inflation is from one year to the next, the smaller the increase, while if inflation increases, the percentage increase in COLA will be higher. However, if ever there were negative inflation, deflation, benefits would be unchanged from one year to the next.
According to the SSA, average payments to retired workers this year are currently $1,907. With a possible increase of 2.57%, in 2025, that would increase to $1,956.
On the other hand, the maximum Supplemental Security Income (SSI) benefits are $943 for individuals and $1,415 for couples. With a COLA of 2.57%, those amounts would rise to $967 and $1,451, respectively.
The official COLA for 2025 will be announced in October this year, once inflation data for July, August and September have been shared. The 2025 cost-of-living adjustment will begin to apply to payments corresponding to January of next year for Social Security and SSI beneficiaries.