Social Security recipients are eagerly awaiting the announcement of the Cost-of-Living Adjustment (COLA) for 2025. The Social Security Administration adjusts benefit amounts each year to account for inflation, ensuring recipients can maintain their purchasing power. The annual COLA is designed to keep up with inflation’s effects, so recipients usually see this increase with their January payment.
The adjustment is set each year in the third quarter, considering the year’s average inflation trends. Social Security isn’t the only benefit adjusted using COLA. Social Security Disability Insurance, Supplemental Security Income, Medicare, and the Supplemental Nutrition Assistance Program also see adjustments.
For 2024, the estimated COLA is yet to be officially announced.
Cola announcement essential for recipients
However, the Senior Citizens League, an advocacy group for senior citizens, has forecasted a 2.63% increase for 2025 based on current inflation trends.
Despite the adjustments, some recipients feel that COLA increases are insufficient to cover actual inflation. According to recent surveys, 69 percent of respondents reported that their household costs, particularly for food and housing, rose faster than the previous year’s COLA. Historically, COLA increases have varied significantly—reaching as high as 8.7% in specific years.
The SSA typically announces the official COLA rate in the second week of October, with the new rate going into effect the following January. As we count down to the official announcement, seniors and other Social Security recipients should stay updated on the latest forecasts and prepare for potential changes to their benefits. The annual COLA adjustment remains critical in ensuring financial stability for millions of Americans dealing with rising living costs.
