This year, retirees who depend on Social Security benefits should know that October 10 is a very important date. It is likely that the Social Security Administration (SSA) will announce the 2025 yearly cost of living adjustment (COLA) on that day.
Experts think that retirees will get a 2.5% COLA in 2025, but this could change based on what they think inflation will be in September. It is expected that the COLA in 2025 will be less than the 3.2% rise that was given in early 2024.
There are also many things that can change that affect how much the final cost of living will go up or down, so the estimate could be much higher or lower than 2.5% depending on how inflation data comes in over the next few days. When buyers look at these numbers, they should think about what they might mean for the budget next year.
Next week, the increase in Social Security checks will be confirmed
It’s clear that this news caused a lot of stress for a lot of Americans, especially since we only have less than two weeks to find out what the senior cost of living increase will be. In spite of this, most experts agree that a drop in inflation will cause a small cost-of-living increase (COLA) of 2.5% for Social Security benefits in 2025.
This will be the smallest rise in prices in three years, based on an estimate of August and July inflation data; proof from September’s inflation data is still needed. Social Security will make the official COLA news on October 10, after the September CPI is made public. That being said, we may not know for sure on October 10, but market players will have made up their minds by then.
Even though it’s not as much as the 8.7% rise in 2023, a 2.5% rise is still needed to help seniors keep up with the rising prices of healthcare, housing, and food. For example, a retired worker who makes $1,920 a month in 2024 would get an extra $48 in benefits in 2025, which would raise their monthly income to about $1,968.
In the same way, survivor payments, which are currently worth an average of $1,509, would go up by about $38 a month, which would help families even more. Even though a lot of seniors get most of their money from Social Security, groups like the Senior Citizens League are still pushing for a 3% COLA.
Should American retirees worry about the COLA increase for their Social Security checks?
People don’t like the word “inflation” because it makes people think of how much less a dollar can buy than it did in the past. When it comes to the economy, inflation is usually better than deflation, but it can still have a big effect. This is especially true for people who get their money from Social Security or other set sources.
Cost-of-living changes to Social Security are supposed to lessen some of the effects of inflation, which is good news. Still, a 2.5% COLA would be the lowest since 2021. Because of this, many seniors are asking Congress to pass laws that link this rise to other financial factors.
That might be possible and make sense, but it might not work because of how big the deficit is and how many people are calling for more economic discipline. Also, higher inflation is not a good thing. So, seniors are stuck between a rock and a hard place right now.
Of course, this all comes to the same conclusion: people who don’t want to depend on the government should always save for retirement, either through a personal account or an employer-sponsored plan. There are, however, millions of Americans who can’t do this at any given time.
Also See:- What aspects of SNAP benefits were altered in October? The list of those impacted
