The COLA represents an increase in Social Security payments. We share with you the date when it is announced how much they will increase in 2025
Each year, the Social Security Administration (SSA) performs a cost-of-living adjustment (COLA) calculation to decide whether monthly benefits will increase in the coming year. This adjustment is essential to maintain beneficiaries’ purchasing power in the face of inflation, and is based on analysis of the most recent economic data.
The COLA is calculated taking into account changes in inflation, and any changes in consumer price indexes may result in an increase in the next year’s payments. This affects all Social Security beneficiaries, including retirees, survivors, as well as those who get Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI).
How can I calculate the COLA
The cost-of-living adjustment (COLA) is directly related to the annual increase in the Consumer Price Index for Urban Wage Earners and Wage Earners (CPI-W). This index measures changes in the cost of a basket of goods and services that urban workers typically consume, and is the basis for adjusting Social Security benefits. The COLA is calculated using CPI-W data for the third quarter of the current year, which covers the months of July, August and September.
To determine the increase in Social Security payments for the following year, the third quarter CPI-W data is compared to the same period of the previous year. The percentage difference between the two sets of data establishes the percentage increase that will be applied to Social Security benefits. This process ensures that adjustments adequately reflect changes in the cost of living and help maintain the purchasing power of beneficiaries.
For the current year, the COLA has been 3.2%, which represents a significant adjustment for Social Security beneficiaries. As for the projected increase for 2025, there are currently only estimates and predictions as to the percentage that could be applied. The official announcement of the exact COLA percentage for 2025 will be made in October, when the final CPI-W data will be released and final calculations will be made.
Official announcement to be made today on how much Social Security benefits will increase in 2025
The cost-of-living adjustment (COLA) for Social Security will be determined once the Consumer Price Index data for the months of July, August and September are available. This data is essential for calculating the benefit increase to be applied next year. The Bureau of Labor Statistics (BLS) will be responsible for releasing this data, and the official announcement of the COLA for 2025 is scheduled for October of this year.
Based on last year’s schedule, the COLA for 2025 is likely to be revealed on October 10, when the BLS releases the Consumer Price Index report. This report will provide the definitive information needed to calculate the inflation adjustment that will affect Social Security and Supplemental Security Income (SSI) payments.
The 2025 COLA will first be implemented on Social Security and SSI payments beginning in January of next year. This adjustment is crucial to ensure that benefits remain in sync with the cost of living, helping beneficiaries manage changes in inflation and the rising cost of goods and services.
Estimated Social Security COLA in 2025
According to the latest estimate from The Senior Citizens League, a leading nonpartisan advocacy group for seniors in the United States, the cost-of-living adjustment (COLA) for Social Security in 2025 could be 2.57%. This projection is based on current consumer price index (CPI) data for the month of July, providing a preliminary indication of how benefits could adjust next year.
It is important to note that this figure is still preliminary, as the final COLA calculation depends on complete inflation information for the months of August and September. This additional data is crucial for a more accurate and final assessment of the necessary adjustment, which will determine the exact percentage increase in Social Security benefits.
The cost-of-living adjustment is made annually to ensure that payments to beneficiaries, including retirees, persons with disabilities and survivors, are kept in line with changes in the cost of living. Therefore, the final COLA percentage may change once the full three months of final quarter data is incorporated.
