Social Security COLA for 2025: How does Social Security Cola Calculate?

Social Security COLA for 2025The cost-of-living adjustment (COLA) for Social Security benefits increased by 3.2% in 2024; this was less than the record 8.7% COLA awarded in 2023. Unfortunately, a non-profit advocacy group called The Senior Citizens League predicts that retirees would receive an even lesser income increase of 2.6% in 2025.

The fact that so many seniors report having financial difficulties is what makes that consistent reduction unexpected. According to the Employee Benefit Research Institute’s 2023 Retirement Confidence Survey (RCS), “58% of retirees are concerned they will have to make substantial cuts to their spending due to inflation.”

Social Security COLA for 2025

Social Security COLA for 2025 Eligibility Criteria

Unlike what some may anticipate, no particular group of people has been assigned a higher COLA in 2025. All Social Security recipients are subject to the COLA hike, including:

  • Retired Workers: People who are now receiving Social Security benefits after reaching retirement age.
  • Survivors are those who are entitled to Social Security payments and who are the spouse, kids, or parents of a deceased worker.
  • Those who are eligible for Social Security disability benefits are known as disabled workers.

How and by whom does Social Security Cola Calculate?

The CPI-W figures from the third quarter of this year compared to the same period last year are used by the Social Security Administration to compute the yearly COLA.

The boost for Social Security beneficiaries will be greater if inflation stays high, but this also suggests that the economy is seeing steady price rises, which may put pressure on the fixed-income people’s budgets.

Despite the initial impression that a greater Social Security COLA for 2025 would be advantageous, it is crucial to take the larger economic picture into account.

Leave a Comment