We have the exact date

The new cost of living adjustment (COLA) for the increase in Social Security benefits in 2025 The announcement continues to keep benefit recipients waiting in anticipation. COLA is introduced each year to keep pace with rising costs and inflation so that the monthly benefits maintain their purchasing power for the coming new year. However, the Senior Citizens League (SCL) has previously stated that the purchasing power of benefits has declined by 20% since 2010, despite the introduction of COLA.

No official announcement yet, but forecasts are lower than expected

COLA for 2025 will be officially announced on October 10, 2024. Although COLA is not added directly to your benefits but rather to your initial coverage amount, you can still get a very accurate estimate of how much your new benefit amount will increase by adding COLA to your current benefits. The current projected COLA statistic is 2.5%. If you get $2,000 per month, that amount increases to about $2,050.

For 2024, COLA was set at 3.2%. The expected 2.5% is lower than initially expected and would be the lowest COLA statistic since the 2020 COVID-19 pandemic. In 2022, COLA reached a record 8.7% due to the pandemic's drastic impact on the cost of living. Since its inception in 1975, the highest COLA statistic implemented was 14.3% in 1980.

Other important dates to remember

While the COLA announcement is the most anticipated event, there are two other important dates that beneficiaries should be aware of. In early December 2025, the Social Security Administration will send personal notices to all beneficiaries outlining the exact increase they will receive for the new 2025 year. While you can estimate it yourself with the October announcement, you will be informed of the exact amount before the end of 2024.

January 8, 2025 the first batch of Social Security checks will be issued with the adjusted amount. These checks are sent to beneficiaries born between the 1st and 10th of each month. Those born between the 11th and 20th of each month will receive their first benefit increase on January 15, 2025. And those born between the 21st and 31st of each month will receive their first benefit increase on the 22nd. January 2025.

Why isn't a higher COLA necessarily a good thing?

Some beneficiaries may be concerned that projected COLA statistics will reach their lowest level since the pandemic. However, it's important to remember that COLA is based on inflation, which is a general indicator of how well the economy is doing. While a high COLA may seem attractive because it means you're getting more money, it's actually not a good thing because it makes it clear that the economy is in trouble.

The lCoke is a good clue that the economy is beginning to stabilize as industry recovers from both the pandemic and the ongoing war in Ukraine, which is impacting gas prices. However, prices are subject to change at any time depending on the state of the world's broader socio-economic landscape. Even though a lower COLA is currently expected, it cannot be ruled out that prices will skyrocket again next year for some reason.

However, beneficiaries have also pointed out that COLA is based on the CPI-W, which measures the spending habits of current wage earners. Social Security is aimed at retirees who spend significantly more on health and housing costs. These spending habits are underrepresented in the CPI-W due to its bias toward younger age groups, meaning price increases for the most used services are not always reflected as much as they should, resulting in a lower COLA than necessary.