Social Security with COLA increase: what the payments will be like in 2025 and how much I will collect
The COLA increase for 2025 could be smaller than last year. Here’s what the payments could be like next year and how much you could get each month.
Each year, Social Security payments are increased for all beneficiaries if inflation has risen during the year.
Annually, the Social Security Administration (SSA) announces the cost of living adjustment (COLA) in October that will be applied the following year to all benefits.
The COLA represents an increase in the dollar amount benficiaries are sent month over month. This is calculated based on the Consumer Price Index for Salaried Workers in Urban Areas and Administrative Workers (CPI-W), so that beneficiaries do not lose purchasing power as prices rise from one year to the next.
The calculation is made based on data from the third quarter of the current year, that is, July, August and September. Once said data is available, it is compared with those from the same period, but from the previous year. The result is the percentage that Social Security payments will increase.
You may be interested in: These are the new Social Security rules starting in September: who will it benefit?
Social Security with COLA increase: what will payments be like in 2025?
Although there are still several months until next year’s COLA is officially announced, some organizations have already made estimates and predictions, based on the data that has been published so far.
Social Security’s cost-of-living adjustment (COLA) for 2025 could be 2.63%, said Alex Moore, Social Security and Medicare statistician at the Senior Citizens League and managing partner at Blacksmith Professional Services. . This estimate was created after the publication of the Consumer Price Index data for the month of June. Last year’s COLA for comparison was 3.2%.
According to the SSA, average payments to retired workers this year are $1,907. With a possible increase of 2.63%, for 2025, they would be $1,957.
On the other hand, the maximum Supplemental Security Income (SSI) benefits are $943 for individuals and $1,415 for couples. With a COLA of 2.63%, they would rise to almost $968 and $1,452, respectively.
It is important to mention that the estimate of 2.63% for COLA 2025 is only preliminary and is subject to change. The official COLA for 2025 will be announced in October this year and would come into effect for payments that correspond to the month of January 2025 and the subsequent 11 months.