Social Security beneficiaries looking forward to the official cost-of-living adjustment announcement for 2025 don't have much longer to wait. The Social Security Administration typically announces the COLA for the following year in October, and now we know that it's set for next week.
Although we still have to wait until next week to get the official announcement, since the SSA is transparent on how the COLA is determined, experts in the field can make accurate predictions for what it could be, based on inflation trends.
Below, we'll detail some of the latest expert predictions and fill you in on the exact date of the announcement. We'll also be keeping this page updated with more predictions and the official COLA once it is announced.
For more, don't miss how to apply for Supplemental Security Income and how to apply for Social Security benefits for your child.
The SSA determines the COLA from the increases in the Consumer Price Index for Urban Wage Earners and Clerical Workers, which is a measure of the average change in prices for consumer goods and services, released monthly by the Bureau of Labor Statistics. There are other factors for determining the COLA, but it's essentially put in place to account for inflation and will increase the benefit payments for beneficiaries receiving Social Security and Supplemental Security Income.
Announced in October, the COLA goes into effect January of the following year.
Which government benefits make adjustments using COLA?
Social Security isn't the only government benefit that is affected by the COLA. Social Security Disability Insurance, Supplemental Security Income, Medicare and Supplemental Nutrition Assistance Program (including food stamps and other programs all use COLA to account for inflation when setting benefits.
When will the SSA officially announce the 2025 COLA increase?
The Social Security Administration typically announces the COLA increase for the following year sometime in mid-October, with the new rate going into effect in January of the new year.
We expect the SSA to announce the 2025 COLA increase on Oct. 10, 2024.
Experts predict a lower COLA for 2025
The Senior Citizens League, a nonpartisan advocacy group for senior citizens, has forecast a lower COLA for 2025 versus 2024's 3.2%. The League's latest predictions point to a COLA of 2.5%, which is slightly lower than its August prediction of 2.57%.
If the 2025 COLA is 2.5%, it would translate to a $48 increase in the monthly benefit payment, bringing the average monthly total to $1,968. The League also points out that while the latest prediction is lower than the past few years, 2.5% is still within the 20-year historical average of 2.6%.
A 2.5% increase is likely lower than desired for beneficiaries, but there's more to the story. A lower COLA is a sign of lowering inflation, which could translate to a price reduction of some of your daily essentials.
It's also important to keep in mind that the $48 increase is for the average monthly benefit and your exact monetary bump is dependent on a few factors. For instance, for retirement benefits, if you wait until you're 70 years old before you apply, you'll get a larger monthly check versus if you apply as soon as you qualify -- at 62.
The adjustment is closely watched by seniors because the annual COLA change is designed to help them keep up with rising costs. The annual COLA increase has been as high as 8.7% in recent years, but some say it's not enough to cover inflation. According to a Senior Citizens League survey, 69% of respondents said their household costs rose faster than the COLA last year, with costs for food and housing leading the way.
COLA Increases Year Over Year
| Year | Increase over previous year |
|---|---|
| 2024 | 3.2% |
| 2023 | 8.7% |
| 2022 | 5.9% |
| 2021 | 1.3% |
| 2020 | 1.6% |
Keep in mind that these are estimates that can change every month based on the previous month's inflation rate, and although they tend to be somewhat in line with the official rate, they're not always spot on.
For more, find out what to do if you never received your Social Security check and how to determine your Social Security benefits with this free tool.