For retirees who receive Social Security benefits, there’s not a lot of ongoing work after you start collecting your payments. Aside from keeping your information updated and handling taxes on benefits if required, most retirees can sit back and enjoy their payments.
However, there’s an important date to note this year: October 10, 2024. On this day, the Social Security Administration (SSA) will announce the much-anticipated 2025 Cost-of-Living Adjustment (COLA).
Here’s why you should mark your calendar for this important announcement and what to expect.
The Significance of October 10
Every year, Social Security announces a COLA that adjusts benefits based on inflation. This adjustment ensures retirees’ benefits keep up with rising living costs, offering a crucial boost to monthly payments.
The announcement for the 2025 COLA will be made on October 10, 2024, giving retirees a clear idea of how much more they’ll receive starting in January 2025.
To stay updated, retirees should visit the Social Security Administration’s website and check the press releases section on this date. The SSA will reveal the COLA percentage increase, and likely additional details, including the average increase in monthly benefits for retirees.
Why Is the COLA Important?
The COLA is based on inflation data, specifically the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which tracks changes in prices for goods and services. The SSA uses the average CPI-W from the third quarter of each year to calculate the adjustment.
This means the COLA is designed to help retirees maintain their purchasing power as inflation impacts the cost of essentials like food, housing, and healthcare. Without the COLA, retirees could lose out financially as prices increase over time.
How Is the 2025 COLA Calculated?
The SSA determines the 2025 COLA by comparing the average CPI-W from July, August, and September of 2024 with the same months in 2023.
The percentage increase, rounded to the nearest tenth of a percent, will be the official 2025 adjustment.
Why is the announcement made on October 10? This date coincides with the release of September’s inflation numbers from the Bureau of Labor Statistics (BLS). Once the BLS reports these numbers, the SSA can finalize the COLA for the upcoming year.
What to Expect from the 2025 COLA
According to early predictions, the 2025 COLA is expected to be around 2.5%. This is a modest increase compared to last year’s 8.7% adjustment, reflecting slower inflation in 2024.
For the average Social Security retiree, this 2.5% increase could mean an additional $48 per month in benefits, bringing much-needed relief, though smaller than last year’s bump.
| Year | COLA Percentage | Average Monthly Increase |
|---|---|---|
| 2023 | 8.7% | $146 |
| 2024 | 3.2% | $56 |
| 2025* | 2.5% | $48 |
| *Projected increase for 2025 |
What Else Could Be Announced?
The COLA announcement is often accompanied by other significant updates to Social Security, such as changes to the maximum taxable earnings.
For example, in the press release for the 2024 COLA, the SSA announced a rise in the Social Security payroll tax maximum, impacting higher earners.
It’s likely that the October 10 press release will also include similar information, which could affect how much you contribute to Social Security if you’re still working and earning above a certain threshold.
What Happens If You Miss the October 10 Announcement?
While it’s beneficial to check the SSA website on October 10 for the latest news, don’t worry if you miss it.
The SSA will send out notifications by mail to all recipients starting in December, letting you know your exact new benefit amount for 2025. These updates will also be available online through your My Social Security account.
For over 50 million Social Security retirees, October 10, 2024, is an important date to mark on the calendar.
The 2025 COLA announcement will give insight into how much benefits will increase starting in January 2025. While the predicted 2.5% increase might be smaller than recent adjustments, it’s still vital in helping retirees keep pace with inflation.
Be sure to visit the SSA website or wait for your mailed notification in December to understand exactly how your benefits will change in the new year.
FAQs
What is the COLA announcement date for 2025?
The 2025 COLA will be announced on October 10, 2024.
How much is the expected COLA increase for 2025?
The 2025 COLA is expected to be around 2.5%.
Will my benefits automatically increase with COLA?
Yes, your benefits will automatically increase based on the COLA starting in January 2025.
How can I find out my new benefit amount?
You’ll be notified by mail in December or can check your My Social Security account online.
Why is the 2025 COLA lower than last year?
The lower COLA reflects slower inflation compared to 2023.
