Millions of older Americans depend on Social Security benefits each month, with many relying on that money as their primary income source. That’s why Social Security’s cost-of-living adjustments, or COLAs, are so important to retirees.
Without these automatic COLAs, Social Security benefits would stay the same each year, leaving many seniors to struggle with rising costs and losing buying power over time.
That’s why the Social Security Administration (SSA) introduced automatic COLAs in 1975—to help seniors keep up with inflation.
What to Expect for 2025’s COLA?
At this point in the year, many Social Security recipients are eager to know what next year’s COLA will be. Unfortunately, it’s still too early for an exact number.
COLAs are based on the third-quarter changes to the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). Since September isn’t over yet, the SSA won’t release a final CPI-W reading until October.
Mark your calendar for October 10, when the official COLA for 2025 will be announced. But for now, experts can make educated guesses based on the inflation data available so far. And with August’s CPI-W reading out, there’s a fresh estimate.
Seniors Should Prepare for a Smaller 2025 COLA!
According to the Senior Citizens League, the 2025 Social Security COLA is projected to be 2.5%, slightly down from their previous estimate of 2.57%. It’s also lower than the 3.2% COLA Social Security recipients received at the start of 2024.
While the idea of a smaller COLA might sound disappointing, there are some important things to consider.
First, this 2.5% estimate isn’t final. Without a full set of inflation data, no one can predict the exact number just yet.
Second, a smaller COLA reflects slowing inflation, which is good news. If prices for things like groceries and gas aren’t rising as quickly, Social Security benefits could stretch further. So, a 2.5% COLA might actually help retired workers more than expected.
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October 10: The Big Day for Official COLA News!
On October 10, the SSA will have the final CPI-W reading and can announce the official COLA for 2025. This will end the speculation and give seniors a clear picture of what to expect.
In the meantime, using the 2.5% estimate as a rough guide can help you start planning financially for 2025. However, keep in mind this number might shift slightly up or down in the coming weeks.
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Maximizing Your Social Security Benefits!
As you think about your financial future, remember that there are ways to boost your Social Security benefits. A little-known “Social Security secret” could help you increase your retirement income by as much as $22,924 per year!
Once you know how to make the most of your Social Security, you can retire with more confidence and peace of mind.
Keep an eye on the SSA’s website for the official COLA announcement on October 10, and use this time to prepare for any changes coming in 2025.